Insurance Affordability in Focus: Regulatory Reviews Underway in AU and NZ

Insurance affordability is fast becoming one of the defining issues of this decade for insurers, regulators and customers across Australia and New Zealand.

1. NZ Government Launches Insurance Affordability Review

In New Zealand, the government has announced a focused review into residential insurance affordability, with findings due mid-2026. The concern driving reform is the visible deterioration of affordability.

Residential premiums have increased at three times the rate of general CPI since 2011, including a 40% rise in the past two years alone.

A proposed increase to the Natural Hazards Commission levy, from 16 cents to 24 cents per $100 of cover, has been paused to avoid compounding household pressure during the review. Read the full resource →

2. Australia Examines Small Business Insurance Pricing

In Australia, submissions to the inquiry into the regulation and pricing of modern insurance products for small businesses close on 6 March.

The inquiry will examine whether regulatory frameworks remain fit for purpose in the current risk environment, with a final report due in October 2026.

The findings are expected to influence future pricing transparency and product accessibility. Read the full resource →

3. Affordability Emerges as Market’s Top Concern

Both processes signal heightened regulatory attention and a clear community expectation that insurance must remain accessible, sustainable and trusted.

In Australia, premium affordability and insurability are now cited as the number one issue facing the Australian market, identified by 22% of industry leaders. The drivers are structural as much as cyclical.

Claims inflation continues to escalate, medical inflation rose 5.1% in early 2025, and social inflation, particularly litigation pressures, is increasing liability costs. Layered on top is the growing frequency and severity of catastrophic weather events, testing the resilience of traditional risk-transfer models. Read the full resource →

4. Gen X Navigates Financial Pressure

At the same time, workforce capability remains critical. The latest Gen Xperience Year 3 Report highlights that many experienced technical and leadership professionals are managing financial pressure, retirement planning and caregiving responsibilities.

Supporting retention through flexible work arrangements and financial wellbeing initiatives will help sustain the technical expertise required to navigate increasingly complex pricing and risk environments. Read the full resource →

Why It Matters

Affordability is no longer purely a pricing issue; it is increasingly emerging as a protection gap issue. As premiums rise, households and small businesses may reduce cover, accept higher excesses, or in some cases exit insurance markets altogether.

This places greater emphasis on professional judgement across underwriting, pricing and claims functions to ensure products remain accessible while continuing to reflect underlying risk.

Maintaining affordability will require a renewed focus on risk mitigation alongside risk transfer. Supporting customers to better understand resilience measures, business continuity planning and exposure management will become increasingly important in reducing the likelihood and severity of loss.

This represents a shift in the role of the profession, from responding to events after they occur, to helping prevent or minimise their impact in the first instance.

Immediate Priorities for Insurers and Brokers

Immediate priorities for insurance professionals include strengthening technical pricing and underwriting capability, improving customer communication around risk and resilience, supporting mitigation-focused advisory conversations, engaging constructively in emerging policy discussions, and maintaining CPD aligned to evolving climate and liability risks.

Affordability will remain under scrutiny across Australia and New Zealand. As expectations increase, organisations that invest in skills, data, transparent communication and resilient teams will be best placed to demonstrate value and sustain trust in the years ahead.