New Zealand Insurance Report Q2 2016
BMI View: The New Zealand insurance market is relatively small by international standards and a subdueddomestic economic outlook weighs in on premium growth in both the life and non-life sector alikethroughout our forecast period to 2020. The strengthening of the American dollar also means that themarket will contract in 2016 once again sharply in dollar denominated terms. Over the longer term,demand for key non-life lines such as property and motor are likely to remain high while demand for lifeproducts (the smaller market currently) is expected to grow as awareness of the benefits of life products inconjunction with state-provided retirement schemes is raised.
Key Updates And Forecasts
The weakening of the New Zealand dollar continues to be a drag on the growth prospects of the insuranceindustry in terms of dollar denominated growth for both sectors. 2016 will see another strong US dollarcontraction in all insurance lines.
New Zealand's life insurance market is underdeveloped but does offer growth potential. At present, weexpect life premiums to grow broadly in line with GDP, increasing from NZD2.4bn in 2015 to NZD3bnin 2020 while over the longer term demographic trends, including an ageing population and increasinghousehold disposable income, will lead to increased demand.
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