Personal insurance claims top one billion dollars
The amount paid out in claims by the personal insurance industry (life and income protection insurance) in the year ending December 2013 was $1,113,506 making it the third successive year that the New Zealand industry has paid more than $1b out in claims.
FSC Chief Executive Peter Neilson, in releasing the industry statistics for the year to 31 December 2013, particularly welcomed the growth in income protection insurance over the last five years. Annual premium income for individual trauma insurance (that usually covers loss of income following severe health issues such as stroke, cancer or heart attacks) had grown by 58% over the period. Other individual replacement income insurance premiums had grown by 29% and term life insurance premiums had grown by 31%. Over the same period pay-outs from income protection policies grew by 95%.
The growth rates are all well in excess of inflation over the same period which suggests the gap between personal insurance held and the risk exposure is narrowing.
Most New Zealand families with a mortgage have life insurance but only one in five New Zealand families have income protection cover. As most New Zealand two income families would be ineligible for a sickness benefit if they were off work for an extended period, because of the family income test. This is the greatest area of vulnerability for New Zealand families and it is good to see the insurance gap narrowing.
Many New Zealanders don’t realise that they are two times more likely to be unable to work for six months or more following a major health problem compared with being off work for six months following an accident covered by ACC.
The FSC Quarterly statistics are available on the FSC website.