Going undercover: more Kiwis running the risk with falling rates of Health, Home, Car and Life Insurance
Almost 1 in 7 Kiwis (13.5%) now have no insurance whatsoever, up from fewer than 1 in 10 (9.8%) in 2005, the latest data
from Roy Morgan Research shows.
The proportion of New Zealanders covered by all types of insurance has been in steady decline. In the 12 months to
January 2005, 85.9% had General Insurance such as Home, Vehicle or other Property; as of January this year, it is 79.4%.
The proportion with Life or Risk Insurance is down from 42.8% to 39.5%.
But Private Health Insurance has suffered the biggest proportional decline over the period, from 1 in 3 Kiwis covered in
2005 to just 1 in 4 at the start of 2014.
% New Zealanders with each type of Insurance
Click for big version.
Source: Roy Morgan Research Single Source: Feb 2004 – Jan 2005 (n = 12,766) and Feb 2013 – Jan 2014 (n = 12,480). A
small proportion of people can’t say if they have insurance.
Over the period, average annual Private Health Insurance costs have ballooned by over 50%, from $1136 to $1726, costing
the average policy-holder almost $600 more per year.
The rising average dollar expenditure can be largely attributed to members dropping out altogether when policy costs
become too high. In 2005, 782,000 Kiwis had health insurance costing them under $2000 per year; today, it’s 516,000. But
while the number of Kiwis who spend over $2000 per year on private health insurance has almost doubled from 115,000 to 222,000 in the period, this still equates
to around 159,000 leaving the system.
Private Health Insurance coverage rates have declined across all groups, most dramatically among 25-34 year-olds, with
only around 1 in 5 now covered compared with 1 in 3 in 2005. The proportion of 50-64 year olds covered has also declined
sharply, from just under half in 2005 to 37% now.
Overall, 84.1% of New Zealanders have some kind of insurance, down from 88.8% in 2005.
Pip Elliott, General Manager, Roy Morgan Research NZ, says:
“The rate of all forms of insurance coverage among New Zealanders has declined over the past decade, particularly in the
area of private health. Consequently, Kiwis have become increasingly reliant on the national public health system.
“Right now, it’s a vicious cycle: rising private health insurance policy prices lead to fewer participants (and a
concentration of them with higher-cost medical needs), which in turn leads to higher costs again.
“Two thirds of Kiwis (66.5%) with Private Health Insurance are with one of the top three providers: Southern Cross
Healthcare (including Aetna), Tower or Sovereign. Although the market share for Southern Cross has declined from 52.7%
since 2005, it still remains far and away the largest provider, with 48.4% of the market.
“Around 4 in 10 of those with private health insurance obtained it through their employer, and another 4 in 10 through
an insurance broker, institutionally affiliated or independent financial advisor or the insurance company directly.
“Australians are slightly less likely than New Zealanders to have General Insurance (74.6% compared with our 79.4%) but
are overwhelmingly more likely to have Private Health Insurance (40.6% vs our 25.2%).”
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