Kiwis Face Rising Insurance Costs as Financial Worries Mount

May 30, 2025 – New Zealand
Insurance costs have surged to become the fourth-largest financial concern for New Zealanders, according to recent data from Consumer NZ. This shift underscores the increasing pressure on household budgets, as insurance now ranks just behind housing, groceries, and debt in terms of financial worries. The findings reveal a notable change since October 2024, when insurance was listed as the sixth-largest concern among New Zealanders.

Rising Premiums Trigger Alarm

The national survey, which gathered insights from over 1,000 respondents, highlighted the significant increase in premiums across various categories, including house, contents, vehicle, and health insurance. As these costs continue to rise, many households find themselves grappling with financial stress related to insurance affordability.

Rebecca Styles, investigations lead at Consumer NZ, emphasized that the rising costs are making it increasingly difficult for individuals to access essential insurance coverage. “Insurance is meant to provide a safety net, but for many people, it’s becoming increasingly difficult to access. When you add the complexity of policies and the lack of transparency, it’s easy to understand why trust in the industry is falling,” Styles stated.

Environmental Risks Affecting Premiums

In its upcoming report focusing on house and contents insurance, Consumer NZ is set to address the affordability challenge in light of escalating climate-related risks. Increasingly severe and frequent weather events are leading to higher risk-based pricing, particularly affecting policyholders in high-risk areas who are facing higher premiums or even difficulties in obtaining coverage.

“We’re hearing more and more from consumers who feel they’re being priced out of essential cover,” Styles noted, indicating a growing sentiment among policyholders feeling the burden of rising costs due to environmental factors.

Interestingly, while environmental risks are influencing insurance pricing, public concern about climate change itself appears to be waning. The report indicates a decrease in the percentage of respondents identifying climate change as a top concern, dropping to 12% from 15% in January and 17% the previous year.

Broader Economic Pressures Persist

In addition to insurance costs, New Zealanders are grappling with broader economic pressures. A significant 65% of survey respondents identified cost-of-living issues as their primary concern, a number that suggests escalating stress on household budgets. This trend aligns with rising costs across various categories, including essential goods and services.

Findings from the Insurance Council of New Zealand (ICNZ) further reflect changes in consumer behavior regarding insurance relationships. A recent ICNZ-commissioned study showed that 20% of respondents changed their insurer within the past two years, with another 34% having done so within the last five years. Despite these shifts, 32% of respondents indicated that they had never switched insurers.

Amidst this backdrop, 21% of policyholders routinely compare insurance offerings upon renewal, although a quarter of those surveyed admitted they do not explore alternative options. “The survey shows that a relatively low number of New Zealanders consider switching their insurance provider,” said ICNZ Chief Executive Kris Faafoi.

Ongoing Financial Hardship

Compounding these concerns is the ongoing financial hardship experienced by many households in New Zealand. Research from Ipsos revealed that one in four households struggles to meet everyday costs, a statistic that has remained consistent since 2023 but has increased compared to 2022. Financial pressure tends to be more severe among lower-income families, with nearly half of survey respondents expressing worries about job stability.

In summary, the marked rise in insurance costs is not only contributing to Kiwis’ financial anxieties but is also reshaping the insurance landscape as consumers navigate affordability challenges and potential coverage gaps. As the situation evolves, it remains critical for both consumers and industry stakeholders to address the growing financial strain on households.

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