Industry reset sees risk-based pricing coming for many homeowners.

As the frequency of severe weather events grows, New Zealanders can expect a shift in how insurance cover is assessed, a senior insurance executive says.

Sacha Cowlrick, Executive General Manager Business at Vero, says the impact of climate change on the environment is one of the factors causing insurers to look to specific risk-based pricing for premiums on homes and businesses.

“We live on an island where it rains and shakes a lot,” she says. “Climate change is here to stay and as we get to better understand where and how it affects us in New Zealand, there will be a shift and change to premiums.”

Her comments come as figures released in May from Stats NZ show home insurance premiums have increased 24.6 per cent in the year to March, the highest increase since the Canterbury earthquakes. On top of that, contents insurance premiums have shot up 28 per cent, the highest annual increase since 1987.

Cowlrick says factors such as high inflation, rising building costs, location, and the cost of reinsurance (the insurance insurers take out), are contributing to the rise in premiums.

“New Zealand is the second most vulnerable country to natural hazards in the world when measured by the predicted annual cost of such events as a percentage of GDP. This is a key reason why reinsurance (which the Insurance Council of New Zealand says has risen by up to 40 per cent) is more expensive and challenging to access from our global reinsurers; we’ve certainly put ourselves on the map.”

Her views were echoed recently by the Insurance Council of New Zealand Chief Executive Kris Faafoi who said affordability will be a “continuing” challenge for the sector as severe weather events become more common.

While all premium prices are based on risk, Cowlrick says insurers have historically spread that risk – and the cost – more evenly across the community based on information of the time. In the future, Kiwis can expect to see premiums that are more affected by  their properties’ risks as the data we all have access to evolves.   


Sacha Cowlrick, Executive General Manager Business at Vero New Zealand. 


As a result, premiums for some people in areas identified as high-risk will increase more than market average. “We know this can add extra confusion and stress,” she says, “but there are things people can do to minimise the impact.”  

“We are here to help with that,” she says. “We encourage people to understand their risk profile and to work with their brokers to look at what options they have, for example, around the level of excess in a policy and to investigate ways it is possible to reduce risk.

“Over time, insurers will innovate to capture and price for increasingly specific detail about individual businesses and households so specific mitigating actions to reduce risk can be more directly rewarded.”

Cowlrick says the better data and modelling which enables risk-based pricing can also be leveraged to help home buyers and business owners better understand their risk. “They will become hungry for this data and, as insurers, we have a big role to play in meeting this need along with brokers.

“Climate change is part of our landscape now, it won’t go away,” she says. “We need to have a big reset in our thinking around risk in New Zealand, especially since the events of last year like the Auckland Anniversary Weekend flooding and Cyclone Gabrielle.” The Insurance Council of New Zealand earlier this year revealed claims associated with these totalled $2.47 billion.

“Following the 2023 weather events, the need for insurers to educate and advocate on behalf of our own sector, and more broadly the country, to protect the availability and accessibility of insurance for New Zealanders has stepped up a notch.”

She says public resources such as the new Toka Tū Ake EQC Natural Hazards Portal which helps New Zealanders find information on natural hazard risks in their area, will assist with this. While Vero is investing in a resource hub to equip brokers tools, insights, regulatory updates, and training to better support customers with personalised advice, and is a key feature of Vero’s role as an educator and community advocate.

“Through Vero, we need to be part of the conversations about what we are doing with this information, how we manage it, how we build and where we build; and about being part of the solution to create better futures for New Zealanders in a changing environment.”


For more information please visit Vero Insurance New Zealand