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A rising tide of complex claims

As economic pressures mount and technology advances, New Zealand insurance brokers face a complex claims environment requiring greater expertise and client education

Meg Warner

NZI

Industry experts

Petra Lucioli

Delta Insurance New Zealand

Sally Davis

DUAL New Zealand

With over 20 years of experience in the insurance industry, Meg Warner has distinguished herself as a strategic leader, adept at navigating both the broker and insurance landscapes. Her career is marked by her ability to lead large teams towards achieving excellence, currently in the areas of technical and specialist claims management. Warner’s strategic vision is centred on enhancing client experiences and fostering a people-centric culture within her teams. Her unwavering commitment to professional growth and client satisfaction underscores her reputation as a forward-thinking and respected figure in the industry.

NZI

Meg Warner

Petra Lucioli is a UK-qualified solicitor with over 20 years of experience in the insurance industry, specialising in liability claims management. Her career spans both the UK and New Zealand, where she has developed strong expertise in professional indemnity and financial lines claims. Lucioli began her career as a litigator in private practice before transitioning to in-house, where she honed her specialisation in liability claims management. She also brings extensive executive and governance experience to her role. A passionate advocate for customer service and risk management, Lucioli is dedicated to leveraging technology to enhance the delivery of insurance services and improve outcomes for clients.

Delta Insurance New Zealand

Petra Lucioli

Sally Davis is DUAL New Zealand’s national claims manager. She joined DUAL in 2015 as a senior claims officer and was appointed to the role of claims manager in 2021. With 18 years of industry experience – primarily in liability and financial lines – Davis has more recently expanded her remit to include oversight of commercial property and commercial motor claims at DUAL. Davis began her insurance career as a liability underwriter at Lumley, before transitioning to its claims team where she leveraged her legal background to great effect. Today, she leads a team of four in-house liability claims specialists and oversees the TPA function for property and motor claims. She works closely with a range of stakeholders, including DUAL’s carriers, legal panel and loss adjusters, to deliver high-quality claims outcomes.

DUAL New Zealand

Sally Davis

“A worrying trend we are seeing is an increase in lithium-ion battery-related fires. This has seen an increase of around 17% since last year on these types of claims across all our IAG brands”

Meg Warner, NZI

WHEN A simple fender-bender can end up causing total loss of a car and a plumbing leak can drain thousands from a property policy, insurance brokers know they’re facing a different kind of storm – one fuelled not just by the weather but by technology, economic pressures and rising repair costs. Across New Zealand’s insurance sector, claims inflation is reshaping everything from motor and property coverage to management liability and cyber risk. Brokers and insurers are grappling with a spike in costs, a surge in complex claims and a tightening regulatory environment. Insurance Business TV spoke to experts in the area at a recent Executive Insights panel to hear their views. Key players in the industry say navigating these shifts will demand sharper risk management, better broker education and a closer eye on emerging threats as the traditional boundaries of insurance continue to shift underfoot.

“The key trend, and this has been happening for many years, is claims inflation. What we’re seeing is individual claims are costing more money”

Petra Lucioli, Delta Insurance New Zealand

Some insurers are developing innovative solutions to address these challenges. Meg Warner, executive manager for broker and specialist claims at NZI, said the firm is working hard to manage and reduce the costs associated with light vehicle claims. “As part of the IAG Group, NZI customers can benefit from one of the 10 AMI MotorHub sites across New Zealand [AMI is also part of the IAG Group],” Warner said. “The average key-to-key time is 3.5 days*, and with courtesy vehicles available, this is making a real difference to the disruption our customers feel following a minor accident.”

Warner has observed similar patterns in property claims. “NZI has seen a reduction in property claims over the past two years due to the benign weather we’ve experienced,” she said.

Some insurers are taking preventative measures to address these emerging risks before they result in claims. Warner described one such initiative: “In 2022, we developed our Electrical Inspectors offering – a free service for all NZI customers. Our team of qualified electricians visit NZI customers and undertake electrical reviews using thermal imaging equipment.” The programme involves qualified electricians conducting thorough inspections at client sites. “To date, we’ve visited over 1,500 customers and identified over 3,650 defects, with the team picking up faults that could have resulted in fires,” Warner said.

3d rendering representing a maze. the maze consists of white walls

There is no escaping the tide of rising costs across multiple sectors. “The key trend, and this has been happening for many years, is claims inflation,” said Petra Lucioli, group claims manager at Delta Insurance New Zealand. “What we’re seeing is individual claims are costing more money.” One area that typifies this inflation is motor insurance, where technological advances are significantly increasing repair costs and changing the nature of claims outcomes. “If we look at the motor space, the story there is actually around new technology,” Lucioli explained. “What we’re seeing more widely across vehicles is that they’re getting more and more technology on board, and they’re being built to be replaced rather than repaired.” The statistics backing this trend are striking. “Ten years ago, only 3% of claims were total losses, whereas now we see around 13% of claims are total losses,” she said. “That’s because a relatively small incident may well result in very expensive repair costs, which results in a total loss.” The specialised knowledge required to fix modern vehicles such as EVs has reduced the number of qualified repair shops, creating additional challenges for the industry. This comes as the number of EVs on New Zealand roads has risen quickly in recent years on the back of government incentives.

Yet NZI continues to see large water losses and water-related claims. “Sprinklers and burst water pipes are always on our radar, because these kinds of losses can become large as damage can happen quickly if no one’s around to see the loss occur,” Warner explained. Beyond catastrophic weather events, everyday water damage claims are becoming increasingly common. “More widely, we’re seeing water damage claims which are caused by plumbing defects and general water losses rather than just flooding claims,” Lucioli said. Warner highlighted a new risk category that’s emerging as a significant concern for property insurers. “A worrying trend we are seeing is an increase in lithium-ion battery-related fires,” she explained. “This has seen an increase of around 17% since last year on these types of claims across all our IAG brands. “This includes drones, phones, tablets, e-bikes, cars

Growing number of registered EVs in New Zealand (as of 30 April)

2021

“We’re finding that we’ve got less and less choice of repairers, and that’s driving up the cost of repairs,” Lucioli said. Sally Davis, DUAL New Zealand’s national claims manager, confirmed this trend, highlighting one specific component that exemplifies the problem. “The cost of windscreens in particular has increased significantly with high-tech sensors these days in vehicles.” The extended time vehicles spend awaiting repairs has also led to increased claims for loss of use coverage. “We’ve seen a rise in Loss of Use cover, which is an additional extension on our motor vehicle policies, and that’s due to a backlog and repairer availability,” Davis said.

In property insurance, water damage has emerged as a primary concern for insurers, though the specific causes vary across the ANZ region. “In the property space, water is the main issue,” said Lucioli. “I think there are two sides to that. One is flood claims, particularly in Australia, of course. We’re seeing a number of flood claims, and that does arise from climate change.” New Zealand has experienced its own share of severe weather events, most notably at the beginning of 2023, though it’s been relatively quiet since then. The cost of insured losses in that year were of a radically different magnitude, highlighting the potential impact of similar future events.

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and even campervans. Fires usually start when the items are not in use, and around 20% of our claims occur when these items are charging.” On overall claims losses, Warner said the company sees losses split evenly across home and contents, motor and commercial portfolios. “These fires can happen quickly and can be hard to put out, so our losses are often large.” Property crime is another area showing increased activity, according to Davis. “We’ve seen an increase in theft and malicious damage type claims probably over the last 24 months,” she said.

These inspections have proven effective in preventing potential losses. “We’ve had numerous occasions where our customers had our electrical inspectors come out to assess a risk, find a defect and get it fixed on the same day. We’re catching fires before they occur, and many of our brokers are recommending this to our mutual customers, so we’re expanding our team to help keep up with demand,” she added.

100% Kiwi-owned and operated, Delta Insurance New Zealand was founded in New Zealand in 2014 to answer the call for insurance in emerging and specialised areas. It now insures over 30,000 risks across 18 products in Property, Financial Lines, Technology, Environmental, Commercial Motor and Specialty Lines. Delta Insurance New Zealand products are tailored to the unique attributes of the insurance market in Aotearoa. Delta is committed to underwriting excellence, as well as to customer-centric initiatives, innovation and community impact. Delta Insurance New Zealand won ANZIIF’s Insurance Underwriting Agency of the Year award in New Zealand five times and was named a Top Insurance Employer by Insurance Business in 2023.

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DUAL New Zealand is the country’s leading independent underwriting agency and one of the world’s largest global underwriting agencies. We offer fast, flexible, competitive insurance for small and mid-market businesses and corporates and specialise in property, liability, cyber, motor and transaction solutions insurance. Our entrepreneurial spirit is at the heart of what we do. Over the last 15 years, we’ve pioneered the use of technology to help our people, partners and clients do more – including our online platform WebRater. With offices in Auckland and Wellington, and underwriters in Christchurch and Havelock North, we’re here to support over 4,500 brokers nationwide, ensuring they have the resources, expertise and services they need to thrive.

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As one of New Zealand’s longest-established insurers, NZI is proud to have provided peace of mind for our customers for more than 165 years. NZI has kept pace with industry changes and stayed ahead of the curve when it comes to opportunities and risks faced by Kiwi businesses. We have scale, we have experience, and we’re experts in risk management. When you’re with NZI, you get more than insurance. We actively help Kiwi businesses manage their risks, and provide support through thick and thin. By working with local brokers around New Zealand, we can tailor insurance to meet your needs. Talk to an insurance broker today about how NZI can help protect you and your business. NZI is proudly backed by IAG – the largest general insurer in New Zealand.

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M&A Insights 2021

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Phil Trem

MarshBerry

Timothy J. Hall

Relation Insurance

Gerard Vecchio

MarshBerry

Industry experts

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Mashberry

Gerard Vecchio

Relation Insurance

Timothy J. Hall

Mashberry

Phil Trem

In Partnership with

M&A Insights 2021

Insurance Business America uncovers the answers to brokers’ biggest questions about mergers and acquisitions, with expert insight from MarshBerry, Baldwin Risk Partners and Relation Insurance

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Phil Trem

MarshBerry

Timothy J. Hall

Relation Insurance

Gerard Vecchio

MarshBerry

Industry experts

Mashberry

Phil Trem

Relation Insurance

Timothy J. Hall

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Mashberry

Gerard Vecchio

Proactive approaches to emerging risks

Published 16 Jun 2025

“In that management liability space, there has unfortunately been an increase in internal crime claims. Those ones can obviously take a while to come out in the wash”

Sally Davis, DUAL New Zealand

18,528

30,482

2022

50,726

2023

70,215

2024

77,303

2025

Source: NZ Transport Agency Waka Kotahi, National Vehicle Fleet status

Source: Insurance Council of New Zealand

Annual insurance cost of natural disasters in New Zealand

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

2020

2021

2022

2023

2024

Cost ($m)

Inflation adjusted cost ($m)

Modern vehicles drive motor claims complexity

Water damage and emerging fire risks in property claims

These industry body complaints represent a significant concern for insurance professionals, as they can accumulate substantial costs even when they don’t develop into full legal actions. “The important point – and I think brokers need to be particularly across this – is that quasi-judicial claims can still cost a lot in legal defence costs, so that cover is really important to have in place,” Davis said.

Economic pressure drives management liability claims

While property and motor insurance face technological and environmental challenges, management liability claims are increasing due to economic pressures affecting businesses. “[In] our financial lines area, we’ve seen in the last 12 to 18 months an uptick in our management liability claims book,” said Davis. “This is predominantly in respect of employment dispute claims and also internal crime and fraud.” These shifts reflect broader economic pressures affecting businesses across New Zealand. Davis noted that employment disputes often stem from increased redundancies, which can lead to flawed dismissal processes or substantive unfairness issues. “Perhaps an employee has been dismissed under the guise of redundancy. We’ve seen quite a significant uptick in those sorts of claims, and likewise, in that management liability space there has unfortunately been an increase in internal crime claims. Those ones can obviously take a while to come out in the wash,” Davis said. NZI is also seeing an increase in claims volumes in its liability portfolios, compared to 2024, and Warner said the economy is playing a significant role in this. “Often when the economy is struggling, we see companies facing tougher times, with some falling into liquidation, which can trigger claims on D&O policies, or house sales fall through, resulting in PI claims.” The connection between economic downturns and increased fraudulent activity has long been recognised in the insurance industry. The Insurance Fraud Bureau of New Zealand has said that insurance fraud costs the industry hundreds of millions of dollars each year and that fraud is one contributor to rising premiums because the costs are not absorbed by the insurance companies alone but are passed on to policyholders in the form of higher premiums.

These higher insurance premiums driven by fraud then have a cascading effect on consumer behaviour. As insurance becomes more expensive, individuals and businesses may opt to reduce their coverage or forgo insurance altogether, creating further economic stress in the event of unforeseen losses. In the professional indemnity space, Davis observes a consistent pattern of claims against traditional professions. “For engineers, architects, lawyers and accountants, there are no real identifiable trends at the moment, just general attritional losses. There’s that constant increase in what we see in that quasi-judicial space and industry body complaints. It’s an economic way to make a claim against your professional.”

New Zealand’s insurance regulatory environment is also undergoing significant changes that will impact how brokers and insurers operate. “I think, like everyone, we’re watching the Contracts of Insurance Bill closely and how that rolls through Parliament and, more importantly, when that is going to actually come into force,” said Davis. Another concern for commercial underwriters is the Conduct of Financial Institutions (CoFI) regime, which came into effect in March. “We understand that CoFI applies to consumers first and foremost, ie consumer products,” Davis said. “As a commercial underwriter, you would think that we would be exempt, but there might be some loopholes in that.” The blurred lines between commercial and personal insurance create compliance challenges. “Particularly in respect of some residential aspects to a commercial property risk, where you’ve got a mixed-use body corporate, for example, with some commercial and some residential. We need to make sure we are compliant in those instances,” Davis said. Looking beyond New Zealand’s borders can provide some insight into future regulatory directions, according to Lucioli. “What I tend to see, looking at the region more generally, is that what happens in New Zealand has normally already happened overseas,” she said. “In particular, I keep a very close eye on what’s happening with Australian regulation, because normally whatever happens there happens in New Zealand two or three years later.” One specific development is on her radar. “I’m watching the Privacy Amendment Act, which was introduced in Australia last year, which introduced a statutory tort so that individuals can bring claims for damages where they’ve had their privacy breached.” The Act also strengthened the regulatory framework with “increased penalties and increased enforcement powers for the OAIC [Office of the Australian Information Commissioner]”, she added. This could foreshadow similar changes in New Zealand. “At the moment in New Zealand, the privacy space is relatively lightly regulated, and I would expect to see that changing in the future,” Lucioli predicted. As New Zealand brokers navigate this complex environment of rising claims costs, emerging cyber threats and evolving regulations, staying informed and proactive will be essential to providing value to clients and maintaining competitive advantage in a challenging market. *Live data from I-Bodyshop (MotorHub operating system)

Regulatory changes on the horizon

As traditional insurance lines face their own challenges, cyber insurance has emerged as a critical area of focus for the industry, with ransom claims representing a significant and growing threat. “Ransom is probably the biggest area of claims that we see in the cyber space,” said Lucioli. “What we’re seeing is that those are being targeted more and more on certain professionals, specifically lawyers, accountants and medical professionals.” The sophistication of these attacks has evolved beyond simple ransom demands to multi-stage operations that can impact both the insured and their clients. “What the threat actors are looking for is information. They’ll claim a ransom for putting the information onto the dark web, but then they’ll secondly use that information to attack the professional’s customers, to then try and carry out invoice frauds. So it’s a two-stage process with these kinds of attacks,” Lucioli explained. Warner noted that cyberspace is a concerning area for claims. “Cyberattacks don’t discriminate by industry,” she said. “Luckily, we can help protect businesses who rely on technology, including the safe storage of customer, employee and third-party data, through our Cyber cover.” A layered approach to cybercrime makes the risk management aspect of cyber insurance particularly important. Lucioli suggested that brokers can play a critical role in helping clients navigate this complex landscape. “One of the really key things, of course, is risk management, and it’s very much a moving feast. The threat actors are changing their tactics all the time,” she said.

Cybersecurity: a growing frontier of risk

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