Deloitte’s Insurance Services team has published a paper on the New Zealand life insurance sector, designed to promote further discussion within the industry.
This paper was commissioned by Partners Life following the release of an RBNZ Bulletin on the life insurance industry. It was prepared by a team of Deloitte professionals in New Zealand and Australia comprising of actuarial and insurance specialists, as well as economists. The team conducted independent research to present a comprehensive picture of the New Zealand industry’s unique challenges and opportunities.
The RBNZ Bulletin commented on the profitability of New Zealand’s life insurers, the value for money of life insurance, and insurers’ ability to meet minimum capital requirements. The purpose of Deloitte’s report is to explore whether these observations are indicative of underlying issues within the life insurance industry or, rather, a result of the economic and social environment and the capital framework in New Zealand. In particular, the report focuses on life insurance profitability and capital requirements, given the upcoming review of the Solvency Standard.
The life insurance industry in New Zealand includes several features that differentiate it from other countries. As a result, it can be very difficult to compare sector efficiency, profitability and capital adequacy with other countries based only on high level metrics.
With that in mind, key insights from the report include:
Our paper also notes that a focus on customers (policyholders) is key to future profitability and reputational success. To achieve a sustainable life insurance industry which has the end consumer’s interests as its primary concern, insurers and regulators need to consider all factors from a solvency, sustainability and suitability of coverage perspective.
An appropriate solvency standard is key to ensuring a sustainable life insurance industry for New Zealanders. Above all else, it’s important to strike a balance between providing stability and confidence in the sector without imposing a strain on the industry through unnecessarily high capital requirements, discouraging investment in growth and innovation.
I have extensive practical, strategic and operational experience in the Insurance Industry, where I’ve developed a passion for the end-consumer and how the right needs-based insurance solutions can enhance their financial wellness. This is something I’ve gained through working in the insurance sector for almost 25 years across a number of countries. Through my various roles including Chief Actuary, Chief Customer Officer and Chief Digital Officer, I have developed a deep understanding of the challenges insurers face. Since joining Deloitte New Zealand in 2018, I have led various cross-functional engagements for NZ insurers, including supporting pre- and post-merger activities, IFRS17 implementations and customer and conduct deliverables. I also lead the Actuarial and Insurance practice for New Zealand. I have a passion for the consumer and enjoy partnering with insurers to deliver exceptional customer outcomes. I also love working with people and connecting multiple skillsets to create an outcome that would not have been possible without extensive teamwork and collaboration.