Report
Life insurers' profit jumped 47% in a year their revenue grew just 5%
Source: KPMG, New Zealand Insurance Update 2026
KPMG's 2026 industry report shows life insurers' profit before tax rose from $341 million to $502 million, while the money coming in grew 5% and the claims bill barely moved. Health insurers paid out 103 cents of every dollar they took in and lost money.
By Henry Smith · Insurers · 2026-06-01
What this means for you Life cover got far more profitable for insurers last year, because the money coming in rose while the claims bill stood still. Health cover ran the opposite way: those insurers paid out more than they collected, which usually leads to bigger price rises or thinner benefits.
New Zealand's life insurers made $502 million in profit before tax last year, up from $341 million the year before (KPMG, retrieved 20 August 2026). That is a jump of 47%.
Over the same year, the money coming in from policies grew 5%. The bill for claims and running those policies grew 1% (same source). So profit grew close to ten times faster than the premiums that pay for it. That is not an industry selling more cover. It is an industry keeping more of what it collects.
KPMG publishes both profit figures but never does that division. The 47% is ours: $161 million of extra profit on a $341 million base.
What does the report measure?
The New Zealand Insurance Update 2026 pulls together the accounts of every licensed insurer in the country. Each one contributes its most recent financial year, with year ends up to 31 December 2025. KPMG labels that combined year 2024/25 (KPMG, retrieved 20 August 2026).
Two lines do most of the work here. Insurance revenue is the money an insurer counts as earned from policies during the year. Insurance expense is what it paid out in claims, plus the costs of running those policies. Subtract one from the other and you get the insurance result: what the insurance business made, before investment returns and tax.
The expense ratio is the same idea in cents: the share of every dollar coming in that goes straight back out.
| Life insurance sector | 2023/24 | 2024/25 | Change |
|---|---|---|---|
| Money in from policies (insurance revenue) | $3,997m | $4,194m | +5% |
| Claims and policy costs (insurance expense) | $3,435m | $3,474m | +1% |
| What was left (insurance result) | $440m | $668m | +52% |
| Profit before tax | $341m | $502m | +47%, our division |
| Share paid back out (expense ratio) | 86% | 83% | down 3 points |
All the dollar figures and the 5%, 1% and 52% are KPMG's (KPMG, retrieved 20 August 2026). The 47% is our own division of those figures.
Why did profit jump when the claims bill barely moved?
Start with the gap between money in and money out. It was $562 million in 2023/24 and $720 million last year, $158 million wider in a single year. Those are our subtractions from the figures above (KPMG, retrieved 20 August 2026).
The second piece is reinsurance. Insurers buy insurance for themselves: they pay a bigger company, usually overseas, to carry part of the risk on policies like yours. Life insurers paid 8% more for that cover last year, $1,545 million, up from $1,429 million (same source).
What matters for profit is the net cost: the reinsurance bill minus what reinsurers paid back towards claims. That fell 49%, from $123 million to $63 million (KPMG, retrieved 20 August 2026). Reinsurers carried more of the load, so insurers kept more.
Together those two explain almost all of it. A wider gap plus cheaper reinsurance accounts for $218 million of the $228 million rise in the insurance result. The last $10 million or so sits in items the report does not break out. Almost none of the jump came from selling more cover.
Here is the same story in cents. For every dollar coming in, life insurers kept 8.5 cents of profit before tax in 2023/24. Last year they kept 12.0 cents. The dollars are KPMG's, the cents are our division (KPMG, retrieved 20 August 2026).
Which insurer gained the most?
KPMG names Partners Life twice, in two lists it never joins up: once as the biggest gainer of policy revenue, once as one of the biggest cutters of claims and policy costs. Put them side by side and one company took in $51 million more while spending $36 million less, a swing of $87 million (KPMG, retrieved 20 August 2026).
| Partners Life | 2023/24 | 2024/25 |
|---|---|---|
| Money in from policies | $522m | $573m |
| Claims and policy costs | $498m | $462m |
| Gap between the two | $24m | $111m |
| Share paid back out | 95% | 81% |
The revenue and expense figures are KPMG's (KPMG, retrieved 20 August 2026). The gap and the percentages are ours. The gap widened more than fourfold in one year.
AIA New Zealand shows why you have to read company by company. Its policy revenue rose $38 million and its claims and policy costs fell $10 million. But it paid $101 million more for reinsurance (same source). A gain on the policy line can be swallowed whole by what an insurer pays its reinsurer. Partners Life is not on KPMG's reinsurance list at all.
| Company | What moved | Amount |
|---|---|---|
| AIA New Zealand | Policy money in, up | $38m |
| Resolution Life | Policy money in, up | $32m |
| Chubb Life | Policy money in, up | $20m |
| Asteron Life | Claims and policy costs, down | $70m |
| Swiss Re Life, a reinsurer | Claims and policy costs, up | $133m |
All from KPMG, retrieved 20 August 2026. These are the largest movements KPMG chose to publish, not the whole market.
Why is health cover the opposite story?
Health insurance ran the other way. The money coming in grew 15%, three times as fast as life. It still was not enough. Health insurers paid out 103 cents in claims and policy costs for every dollar they took in (KPMG, retrieved 20 August 2026).
In dollars, health insurers took in $2,666 million, up from $2,309 million, and paid out $2,747 million (same source).
As a sector they lost $80 million on that business. That is better than the $115 million loss the year before, but it is still a loss (KPMG, retrieved 20 August 2026).
Southern Cross is 74% of the health market by revenue, and it lost $46 million (KPMG, retrieved 20 August 2026).
It paid out $2,014 million against $1,966 million collected, and covered the difference from its reserves, the buffer it has built up over the years.
KPMG says leaning on reserves like that "is not sustainable longer term". Medical costs are rising about 15% a year, so the pressure does not ease on its own (same source).
Line the three sectors up. This is what each kept from every dollar coming in, after claims and policy costs:
| Sector, 2024/25 | Cents kept per dollar coming in |
|---|---|
| General insurance, such as car and house | 35c |
| Life insurance | 17c, up from 14c |
| Health insurance | minus 3c |
Our inversion of KPMG's published expense ratios of 65%, 83% and 103% (KPMG, retrieved 20 August 2026).
General insurers had a strong year too: their insurance result grew 50%, from $1,291 million to $1,939 million (same source).
Plenty of households hold both, sometimes with the same group. Last year the life half funded record margins while the health half was propped up by reserves KPMG says cannot keep absorbing the gap. Your next health insurance renewal and the margin inside your life premium are two ends of the same industry.
What does this mean for my cover?
Nothing in this report changes your policy wording or the cover you hold. What it changes is the backdrop to your next renewal letter: across the sector, the price of cover ran well ahead of the cost of claims.
Most life cover in New Zealand is sold on stepped premiums, meaning the price rises each year as you get older. A margin this wide is exactly what price competition eats into. It is the strongest argument in years for comparing life insurance prices across insurers rather than renewing with the same one out of habit.
One product line is the exception. Income protection, which insurers call disability income cover, pays you a monthly amount if illness or injury stops you working. KPMG says claims stayed "at elevated levels, particularly in relation to disability income and health insurance products", with more claims coming in and each one lasting longer, partly because of the economy (KPMG, retrieved 20 August 2026).
So if you hold income protection, that is the one line where insurers really are paying out more. A price rise there is easier to justify than one on plain life cover.
For health cover, paying out 103 cents on every dollar leaves insurers three moves: charge more, cover less, or check claims harder. KPMG expects Southern Cross to use "most likely a combination" of premium increases and cost control (same source). Expect all three to keep moving.
What we could not check
KPMG does not print a day-level publication date. June 2026 comes from its file path and landing page, and our 1 June 2026 date rests on that.
The year labels are not calendar years. Each insurer contributes its own financial year, so one sector total stacks up slightly different twelve-month windows.
Under IFRS 17, the accounting rulebook insurers must follow, insurance revenue is not the cash they collected. It is revenue recognised for cover provided during the year. So "per dollar coming in" here is close to what policyholders paid, not exactly it.
Insurance expense mixes claims with other costs tied to running policies, and the report publishes no pure claims number. So the 1% growth is not claims alone.
Profit before tax also includes investment returns and other items the report does not split out, so part of the 47% may be investment performance rather than insurance. In both years it came in below the insurance result, so those items were a net drag, and KPMG does not say what they were.
The sector total includes life reinsurers such as Swiss Re Life, so some of that revenue is one insurer paying another rather than a household paying a premium.
KPMG's company lists are its pick of the biggest movements, not a full table. Asteron Life's revenue movement is not published, so we cannot do for it what we did for Partners Life.
Sources
- New Zealand Insurance Update 2026, KPMG New Zealand, June 2026
- New Zealand Insurance Update 2026, full report PDF, KPMG New Zealand, June 2026
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