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Risk Insurance Advisor Steve O’Connor helps people ensure they have the right insurance cover when they need it most. Health insurance premiums in New Zealand are escalating dramatically, driven by a perfect storm of factors. Crucially, medical inflation is outpacing general inflation by up to seven times. The primary driver is increased utilisation and demand. The public health system is severely strained, leading to lengthy specialist and surgical wait times. This pushes more New Zealanders, including those who postponed Covid-19 treatments, into the private sector. Insurers are paying out claims more frequently, with volumes reported up by over 60 per cent in the last five years. Secondly, surging medical inflation is unavoidable. It’s not simply about rising costs for existing treatments, but the price of medical progress. New Zealand’s medical trend rate has seen some of the sharpest increases in the Asia-Pacific region, driven by the introduction of expensive, advanced medical technology and high-cost, non-Pharmac-funded specialty cancer treatments. Finally, the ageing population contributes significantly. As policyholders age, their statistical likelihood of requiring costly and frequent medical interventions, such as joint replacements and cardiac surgeries, increases exponentially, pushing up the cost of risk-pooling across the board. I have found that health insurance is the risk product people hold onto the longest. To keep premiums more affordable they choose a higher excess. As such by agreeing to pay a larger amount upfront if you make a claim, you take on more of the initial risk, which can substantially reduce your annual premium. Let’s talk. Steve O’Connor, Insurance Advisor, Insurance Market, 021 862 330, steve.oconnor@insurance-market.co.nz
