How will New Zealand’s life insurance sector perform in 2025?

GlobalData expects the market to reach $3.8b in gross written premiums.

New Zealand’s life insurance market is projected to grow from $3.5b in 2024 to $4.8b by 2029, registering a compound annual growth rate (CAGR) of 7.0% in gross written premiums, according to data from GlobalData. 

The growth is driven by higher demand for whole life and personal accident and health (PA&H) insurance, along with increased awareness of protection policies.

GlobalData expects the market to reach grow by 8.2% year-on-year to $3.8b in gross written premiums in 2025. This year’s growth rate will be driven by ageing population, heightened health awareness, and the rising cost of living.

New Zealand’s economy, mainly supported by agriculture and services, is expected to recover in 2025 with a real GDP growth of 2%, up from 0.73% in 2023 and 0.24% in 2024.

“Economic recovery, coupled with easing inflation and increased private investment, will support household consumption and drive demand for life insurance products,” Swarup Kumar Sahoo, senior Insurance analyst at GlobalData stated. “However, challenges such as high unemployment and inflation could pose risks to this growth.”

PA&H insurance is the largest segment, accounting for 65.3% of the life insurance market in 2024. 

This segment is forecast to grow at a CAGR of 6.9% from 2025 to 2029, supported by rising healthcare costs and a 10% to 15% increase in premium prices this year. The Financial Services Council reported that the share of New Zealanders with health insurance rose from 32% in 2022 to 37% in 2023.

Term life insurance, which makes up 27.8% of gross written premiums in 2024, is expected to grow at a CAGR of 6.4% between 2025 and 2029. 

It remains popular due to its affordability and use in covering mortgages and personal loans.

Whole life insurance accounted for 3.8% of premiums in 2024 but posted a CAGR of 19.2% from 2020 to 2024. It is forecast to grow at a CAGR of 8.0% through 2029. 

Demand is expected to increase as the number of people over 65 in New Zealand is projected to reach 1.3 million by 2040. 

Life expectancy at birth rose from 81.6 years in 2015 to 82.9 years in 2024.

Other life insurance products accounted for the remaining 3.1% of the market in 2024. 

New Zealand’s life insurance penetration rate was 1.3% in 2023, lower than South Korea (7.4%), Hong Kong (15.9%), Japan (6.3%), and Singapore (7.5%).

“However, the rising cost of living will result in underinsurance and hinder the growth of the life insurance market. To address this issue, insurers need to introduce innovative products and leverage digital technologies to make insurance more affordable and accessible,” Sahoo added.