NZ Buildings Insurance in 2026: Premiums Are Softening — Here's How Homeowners Benefit

The NZ Insurance Market Is in a Soft Phase

If you are renewing your buildings insurance in 2025 or 2026, you may be in a stronger negotiating position than at any point in the past five years. New Zealand's general insurance market entered what brokers describe as a "soft phase" in the second half of 2024, and conditions have continued to ease into 2026.

According to Gallagher's March 2026 Insurance Market Update and Marsh's February 2026 New Zealand Market Update — two of the most widely followed industry reports in the NZ market — multiple factors are combining to create favourable conditions for buyers of property insurance.

What Is a Soft Insurance Market?

Insurance markets move in cycles. In a "hard" market (which NZ experienced through 2022–2024 following the Canterbury, Kaikōura, and Auckland Anniversary Weekend flood events), insurers raise premiums, tighten policy terms, and reduce capacity. In a "soft" market, the reverse occurs: more competition, lower premiums, broader cover, and more flexible terms.

The current soft phase is being driven by:

• Global insured losses 5% below the 10-year average in 2025 — fewer major catastrophe events globally means reinsurers are well capitalised and willing to offer capacity at lower cost
• Record global (re)insurance capital of approximately US$838 billion entering 2026 — more capital chasing business pushes prices down
• Strong profitability for NZ's two major insurer groups — IAG (which includes NZI, State, and AMI) reported approximately 50% profit growth through the year to June 2025; Suncorp (Vero and AA Insurance) reported over 40% growth; QBE reported a 27% increase in its June 2025 half-year result
• Global reinsurance costs easing over 12.5% in early 2026 — cheaper reinsurance reduces insurers' costs, and some of those savings are passed on in primary pricing

Who Are the Major Players in NZ Buildings Insurance?

Understanding the structure of the NZ market helps you compare offers more effectively. The market is dominated by two large insurer groups that between them account for the majority of residential buildings insurance in New Zealand:

IAG New Zealand

IAG operates through multiple brands in New Zealand, including NZI (commercial), State Insurance (direct to consumer), and AMI (direct to consumer). IAG reported gross written premium of approximately NZ$3.8 billion in 2023/24, making it the largest general insurer in the country. IAG's intermediated business (primarily NZI) fell 10.4% in its most recent half-year result — a reflection of the soft market rather than a loss of market position.

Suncorp New Zealand

Suncorp operates through Vero Insurance (commercial and broker-placed) and AA Insurance (direct consumer brand, offered through the AA membership network). Suncorp's NZ gross written premium declined 5.6% in its most recent result, also reflecting market softening rather than underlying weakness.

Other Significant Participants

QBE, Tower Insurance, Youi, and a number of Lloyd's-backed specialist insurers (particularly for high-value, commercial, or unusual properties) compete across various segments of the market. This diversity means consumers and businesses who use a broker can often access better pricing and terms than those who deal with a single direct insurer.

What Soft Market Conditions Mean for Homeowners

For residential policyholders, the practical effects of the soft market include:

• More competitive premiums at renewal — if you haven't compared in the past two years, you may be paying above-market rates
• Broader coverage terms — insurers competing for business are more willing to include optional extensions (gradual damage, replacement cost for older appliances, temporary accommodation upgrades) without significant premium loading
• Reduced exclusions — some insurers that previously applied flood, landslide, or specific location exclusions following the 2023 North Island weather events are beginning to ease those restrictions, particularly for properties in lower-risk postcodes
• Better response to risk improvements — if you have made structural improvements, installed a security system, re-roofed, or made other risk-reducing changes, now is an ideal time to report these and ask for a premium review

Caveats: What Could Reverse the Soft Cycle

Gallagher's report warns that a "tipping point" may occur within six months if falling premiums and normalised claims costs intersect, squeezing insurer margins. When that happens, insurers typically respond by tightening underwriting and raising rates. The broker expects early signs to include more selective risk assessment and narrower pricing relief for commercial risks — but residential lines may follow.

Climate-related events remain the largest risk to the current soft market. The La Niña weather pattern, warmer sea surface temperatures, and increased tropical cyclone activity in the South Pacific could generate large weather-related losses that rapidly reverse current conditions. The July 2026 FENZ levy changes will also add to insurance-related costs across the board.

How to Take Advantage of Current Conditions

The best way to benefit from a soft market is to compare — and do so through a broker who can access multiple insurers simultaneously. Direct-to-consumer channels offer convenience, but brokers typically access the intermediated market (NZI, Vero) alongside direct brands, giving you more options.

When reviewing your policy, consider:

• Whether your sum insured is up to date (see our guide on underinsurance)
• Whether your excess is appropriately set — a higher excess lowers premiums, but ensure it's affordable
• Whether optional extensions (gradual damage, temporary accommodation, extended liability) represent value at current pricing
• Whether any property improvements you've made qualify for a premium discount

Submit a quote request and one of our licensed advisers will shop your property across the major NZ insurers to find the most competitive policy for your situation.