Life goals: Premium increases are driving industry growth, despite stagnating demand

The Life Insurance industry has grown over the past five years, despite demand for industry products slowing. Growth has come from annual contractual premium increases on existing policies that account for inflation and the higher risk associated with covering an ageing policyholder. However, net new business has remained negative over the past five years as premiums from new business continue to be offset by the lost premiums from lapsed and cancelled policies. Overall, industry revenue is expected to grow at an annualised 1.3% over the five years through 2018-19. Rising premiums for existing policyholders are expected to continue driving growth over the current year, with revenue expected to rise by 0.3% to reach $3.8 billion...read more.

Industry Statistics & Market Size
Revenue
$4bn
Annual Growth 14-19
1.3%
Forecast Growth 19-24
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Profit
x.x%lock
Employment
2,408
Businesses
29
Market Share of Companies

Industry Threats & Opportunities

  • Revenue has grown over the past five years, despite declining demand for industry products
  • One of the few sources of growth for life insurers has been higher premiums on existing policies
  • Contractual rises in premiums are likely to remain a key source of growth for industry operators

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    Industry Report - Industry Locations Chapter

    The Life Insurance industry is heavily concentrated in the populous regions of Auckland, Wellington and Canterbury. These regions account for just under 90% of industry establishments, while representing just under 58.0% of the New Zealand population. The industry is overrepresented in these regions compared with population share. This is due to most life insurance head offices being located in these areas, which are regarded as financial centres. Life insurers are able to operate out of these centralised locations, and provide life insurance to customers across New Zealand. Hawke's Bay and Waikato account for the remaining share of industry establishments...purchase to read more.

    Additional Insights for the Life Insurance Industry

    IBISWorld has determined the most important Key Success Factors for the Life Insurance are:

  • Effective cost controls
  • Having an extensive distribution/collection network
  • Ability to effectively manage risk

    • IBISWorld analysts also discuss how external factors such as Real household discretionary income and Number of households in the Life Insurance industry impact industry performance..

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    What's in this report

    Industry Products

    What is the Life Insurance in New Zealand Industry?

    Industry operators provide life insurance and life reinsurance cover. Life insurance generally involves the insurer paying out the beneficiaries of the policy in the event of death, disablement, serious illness or injury for the insured individual.

    Industry Products
  • Individual lump sum risk
  • Individual disability income insurance
  • Group life insurance
  • Other life insurance products
    • Industry Activities
  • Term life insurance
  • Permanent life insurance
  • Annuities
  • Income protection
    • Table of Contents

    About this Industry

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources

    Industry at a Glance

    Industry Statistics Snapshot
    Industry Structure
    Executive Summary

    Industry Performance

    Executive Summary
    Key External Drivers
  • Real household discretionary income
  • Number of households
  • year bond rate
  • Population aged 50 and older

    • Current Performance
  • Shrinking market
  • Rising profitability
  • Strong competition
  • Chart: Revenue Growth

    • Industry Outlook
  • Growth factors
  • Life insurance commissions
  • KiwiSaver life insurance
  • Table: Life Insurance Industry Revenue Outlook

    • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Life Insurance Industry Lifecycle vs The Economy

    • Products & Markets

    Supply Chains
    Key Buying Industries
  • Superannuation Funds in New Zealand
  • Consumers in New Zealand

    • Key Selling Industries
  • Funds Management and Other Investment Services in New Zealand
  • Insurance Brokerage in New Zealand
  • Superannuation Funds in New Zealand

    • Products & Services
  • Individual lump sum risk
  • Individual disability income insurance
  • Group life insurance
  • Other life insurance products
  • Chart: Life Insurance Industry Products and Services Segmentation

    • Demand Determinants
    Major Markets
  • Retail clients
  • Commercial clients
  • Chart: Major Market Segmentation for the Life Insurance Industry

    • International Trade
    Business Locations
    Chart: Business Locations by State

    Competitive Landscape

    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Life Insurance

    • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Life Insurance Industry

    • Industry Globalization

    Major Companies

    AMP Life Limited, Sovereign Assurance Company Limited, Asteron Life Limited, OnePath Life (NZ) Limited,
  • Table: AMP Life Limited - financial performance
  • Table: Sovereign Assurance Company Limited - financial performance
  • Table: Asteron Life Limited - financial performance
  • Table: OnePath Life (NZ) Limited - financial performance

    • Operating Conditions

    Capital Intensity
  • Chart: Level of Capital Intensity for the Life Insurance Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

    • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

    • Regulation & Policy
    Industry Assistance

    Key Statistics

    Table: Industry Data for the Life Insurance Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

    • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data

    Jargon & Glossary

    Bancassurance
  • The selling of life insurance products through financial institutions either through establishing a partnership or directly by the bank itself.
    • Bancassurer
  • A banking institution that is also involved in selling life insurance.
    • Churning
  • When financial advisers recommend that clients switch from an existing policy to a new policy with the aim of generating greater up-front commissions.
    • Trail Commission
  • An annual fee paid by either the insurer or the policyholder to the insurance broker or financial adviser for each year the policy is held.
    • What Our Customers Say
    Why buy this report?

    IBISWorld’s Life Insurance in New Zealand market research report can be used to help you: understand market size and growth potential; major companies; draft business plans and pitch books; and conduct benchmarking and SWOT analysis. Our industry analysis highlights macro industry trends in the overall sector and micro trends faced by companies that do business in the industry. The industry report also provides key industry statistics and 5-year forecasts to anticipate future industry prospects so you can decide with confidence.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Life Insurance in New Zealand:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Life Insurance in New Zealand market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Life Insurance in New Zealand, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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