New Zealand Insurance: It‘s not "All Black" in NZ despite relatively soft market conditions

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New Zealand Insurance: It‘s not "All Black" in NZ despite relatively soft market conditions

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29 Jun 2026 17:55:42 ET │ 30 pages

New Zealand Insurance

It’s not “All Black” in NZ despite relatively soft market conditions

CITI'S TAKE

Nigel Pittaway AC

Does NZ present risk to IAG’s and SUN’s ability to deliver flat to rising +61-2-8225-4860

insurance margins? The NZ market has recently been troublesome for both, nigel.pittaway@citi.com

particularly in commercial lines. While, so far, profitability has held up,

commercial premium rates have been trending down for over a year and we Donna Fu AC

detect no hard evidence of a bottom. That said, the pace of rate decline +61-2-8225-4801

appears to be easing and it is possible the worst has passed. Intermediated donna.fu@citi.com

personal lines are also seeing pricing pressure. More positively, retail

personal lines rates are now edging up after the previous declines. So, we Jeff Cai, CFA

forecast positive momentum in the top line, at least in NZ$ terms, with a +61-2-8225-2688

slower rate of decline in 2H26 and NZ$ GWP growth in FY27. Even so, we jeff.cai@citi.com

still forecast declining NZ margins as premium reductions earn through

suggesting Australia will need to provide some offset.

For now, we prefer TWR — Among three insurers with a reasonably significant NZ

skew, we currently rate TWR NZ Buy and IAG and SUN neutral. For TWR, we are

attracted to its valuation and growth opportunities, while we forecast IAG’s NZ

business to continue to report a modestly higher margin than SUN.

Top line NZ$ growth should return for IAG and SUN in FY27 — We forecast ongoing

top line contraction in 2H26, but slight top line growth in NZ$ in FY27. However, this

implies modest A$ GWP decline in FY27 with growth returning in FY28.