More Than a Policy: The Enduring Value of Insurance for Kiwi Lives

If you’ve ever thought, “She’ll be right; I don’t really need insurance,” you’re not alone. The Financial Services Council’s 2024 Money & You report reveals that only 41% of New Zealanders hold life insurance, and just 39% have health insurance. In stark contrast, the Reserve Bank and Insurance Council report that approximately 95 - 96% of Kiwi households maintain home insurance, and Ministry of Transport data show over 90% of drivers are insured. This disparity highlights a paradox: we are far more diligent in protecting our possessions than our lives and wellbeing - the very things most vulnerable to life’s uncertainties. 

This underinsurance exposes a significant risk. When adversity strikes - be it illness, accident, or sudden loss of income - the true value of insurance becomes unmistakably clear.  

The question is not whether you can afford insurance, but whether you can afford to be without it. 

Affordability vs. Protection: The Kiwi Dilemma 

Why do so many New Zealanders remain underinsured? The answer lies in a complex interplay of affordability and perceived relevance. As an industry, we must do more to articulate the critical role insurance plays, particularly at pivotal life stages where it can profoundly influence financial resilience. In the current economic climate, with inflation outpacing wage growth and interest rates rising, every household expense is scrutinised. Insurance premiums are often among the first to be reconsidered. 

Yet, even as budgets tighten, most households continue to prioritise insuring assets such are homes and cars, while allowing personal cover to lapse - effectively wagering that misfortune will not strike. Unfortunately, adversity is indiscriminate, and economic downturns or health crises are precisely when robust protection is most needed. 

The industry is responding by demonstrating tangible value. Insurers are increasingly transparent, sharing metrics such as “95%+ of claims paid” or “$X million paid out to Kiwis in need.” These messages are not mere statistics; they are evidence of our sector’s commitment to supporting individuals and families during their most challenging moments. 

Insurance in action: Delivering certainty amid uncertainty 

Insurance is not simply a financial product - it is a strategic enabler of continuity and peace of mind. Consider the core scenarios addressed by life and health insurance: the loss of a primary earner, a critical illness, a disabling injury, or unexpected unemployment. While ACC provides vital support for accident-related injuries, it does not extend to illness, leaving a significant protection gap that trauma cover, income protection, and health insurance are designed to fill. 

Medical advances have transformed many once-fatal conditions into survivable events. However, survival often entails prolonged recovery and significant financial strain. Today, the majority of insurance payouts support individuals and families as they navigate these difficult periods - not just after bereavement, but during the journey to recovery. For example, in 2024, AIA paid out $167 million in health claims and $139 million in trauma claims, directly supporting thousands of Kiwi families through treatment, rehabilitation, and recovery - enabling them to focus on healing rather than financial hardship. 

Purpose in Practice 

Insurance may appear, at first glance, to be a business of numbers and probabilities. In reality, it is fundamentally about people. At its core, insurance is a promise - a commitment to stand by individuals and families when they need it most. At AMS, our purpose is intrinsically aligned with that of the life and health insurers we serve: to support hardworking New Zealanders in times of need. We are proud to partner with some of the nation’s leading insurers, helping to protect the well-being and financial security of Kiwis across the country.