Howden NZ CEO says “it’s going to be an interesting year” for insurance

Vast impact on the industry

Following the Auckland Anniversary floods – which the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa described as the largest climate-related event to hit the country – Hattingh told Insurance Business: “It’s going to be an interesting year; just starting with the floods already experienced. The impact that this will have on the insurance industry and the reinsurance market is quite vast. On top of that, we are now dealing with the widespread impacts of Cyclone Gabrielle which left a path of destruction in its wake. 

“It’s definitely going to be a challenging market going forward. We’re expecting price increases of between 20% and 30% on clean risks where no losses have been incurred. For those risks where claims have been made, the increases will be substantial.

“Our hearts go out to those clients who have suffered losses – not only did they need to brace for the storms, but they will now need to deal with the impacts of the extreme weather and prepare financially for the impact of increased insurance premiums. So, with relation to property insurance, it’s going to be an interesting and challenging market this year.”

The Wellington-based CEO believes brokers will have to ‘step up’.

“The renewal process or new business submissions will have to start early,” she said, “and the submissions will have to be complete and formatted in a way that is easy for insurers to review. Brokers will have to take a proactive approach with their clients on their loss control procedures. 

“In respect of liability risks, the market remains a hard market for certain professions and risks. In particular, cyber insurance remains challenging – capacity is restricted, premiums and deductibles are increasing, and clients have to demonstrate cyber maturity and risk controls.”

Opportunity for results

For Hattingh, what will be a challenge is working with the market to get the best results for clients.

“The opportunity for us will be to work with our insurers and clients to assist them as much as we can,” she said. “Challenges aside, the immediate focus is to work with insurers in managing the claims from the recent extreme events. 

“I’m blown away by the insurer responses. Many are already going out of their way to help clients, and to make sure that they’ve got the support staff who can deal with the claims. That is good to see, and that is exactly what I would expect from them. Insurance is only as strong and beneficial as the claims responses.”

The Howden leader went on to assert that, without a doubt, there will be rate increases.

“It’s just managing those increases and managing the expectations of clients around those increases,” the CEO told Insurance Business. “Already it is a stretched economic environment after COVID; many businesses are struggling. Inflation has increased over the past few years to the 7.2% at present.

“Insurance premiums have increased on motor with an average of 10% and on home and contents with an average of 17% over the last year. Further increases are inevitable… Howden is here to help and assist our clients in navigating what is going to be an interesting year.”