2023 has been a tough year economically, but in New Zealand, group insurance activity has seen a marked increase.
Southern Cross Healthcare, the largest health insurer in New Zealand, recently reported a 170 percent increase in business join-ups. They attribute this growth to a tight labour market, and concerns about strains on the public health system.
This reflects what we have been observing ourselves in the New Zealand market. Group insurers and brokers serving the group insurance segment all report increased quotation activity and increased business being placed. This applies right across the product spectrum - both group life and group health are experiencing a surge in activity.
Our contacts in the industry have a range of factors that they think are driving this trend.
One common observation are the lingering consequences of the COVID-19 pandemic. During the pandemic, inbound migration to New Zealand dropped to near zero, which has put ongoing pressure on the labour workforce. The March 2023 New Zealand unemployment rate was an unbelievably low 3.4 percent. Employers are having to work harder than ever to attract and retain workers, and having a compelling employee benefits offer is now considered much more important to a prospective worker.
This 'Covid effect', combined with a range of severe weather events in New Zealand, has also raised general awareness in the population about the role and importance of insurance. Workers are looking to their employers to help them manage costs and risks in their lives. Part of this consideration may include a group insurance product.
Some market participants are observing greater "multinational company" influence on employee benefits strategy in New Zealand employers. As more new People leaders at companies have multinational company experience and expectations, they bring new thinking and new employee experience philosophies into the workplace. Providing group insurance benefits is now seen as a key component of a broader employee benefits offering.
This wave of new interest in group insurance and group benefits represents quite a change in the New Zealand workplace. Historically, group insurance (life or health) was not considered an essential part of an employee benefit package in New Zealand, especially with smaller employers. This thinking has now changed quite markedly, and employers of all sizes are interested in how a group insurance offering might be part of their overall workforce budgets. Organized labour unions also advocate strongly for these workplace benefits as part of collective agreements.
Arguably, this new interest is overdue and brings New Zealand workplace benefits thinking much more in line with other mature economies.
To help support this rapid growth in New Zealand group benefits activity, we recently announced the availability of Sentro Third Party Administrator Services. This provides a new customer service option for New Zealand group insurers, brokers and employee benefit providers. They can now enjoy the benefits of the powerful Sentro group insurance and employee benefits administration platform, and assistance with day to day operations and customer service.
Group insurance is very much in fashion in New Zealand. As New Zealand's only group insurance administration software specialists, Sentro is here to help ensure that it is easier than ever for employers to look after their people.