Insurance premiums fall but gap between cheapest and most expensive quotes widens
Insurance premiums in New Zealand have seen a slight decrease on average, though the price gap between the cheapest and most expensive quotes is widening. Experts suggest that insurers are increasingly using granular risk assessments to set prices.
Why it matters
The shift toward personalized risk-based pricing impacts consumer affordability and highlights the importance of comparison shopping in a volatile insurance market.
Many households may have finally seen their insurance premiums get cheaper but the gap between the cheapest and most expensive premiums may also be getting wider.
Stats NZ data show average home insurance premiums between April and June this year were down 0.8% on the same period last year, average contents insurance premiums were down 4% and average vehicle insurance premiums were up just 0.6%.
Even when including life and health insurance, average total insurance prices have increased just 1.2% – well below the 2% rise in wages and the 4.1% rise in overall consumer prices.
Justin Lim, the chief executive of insurance comparison website Quashed, said changes to how insurers assessed risk were starting to have some effect.
“Insurers are adjusting their pricing ... where they’re more actively reflecting the risk in the pricing.”
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