Health and life insurance play an important role in New Zealand's healthcare system, and now there is an opportunity to better recognise and strengthen that role alongside the public system, according to a new report by the Financial Services Council of New Zealand (FSC).
A new 44-page report “The role and contribution of insurance in New Zealand’s healthcare” released on 14 August 2026 says that health and life insurance are not alternatives to the public health system, they are complementary pillars of it. The report produced by MartinJenkins and commissioned by the Financial Services Council reveals that New Zealand’s health system is under growing pressure. The question is how to make better use of all the capacity the country has.
The report shows the average health insurance claim paid per member has risen 75% since 2021, reaching NZ$1,921 ($1132) in 2025. At the same time, more people are dropping their cover, with policy terminations rising from 7% in 2022 to 9% last year.
FSC Chief Executive Kirk Hope said, “Health insurance is being used more, claims are rising, treatment costs are rising, and households are feeling it." He said this creates a challenge. Insurance is helping fund treatment and get New Zealanders access to care, but affordability risks putting that support beyond the reach of more households.
A new FSC polling found 55% of the participating New Zealanders want the Government to prioritise greater use of public and private healthcare working together as demand grows.
The report canvasses some of the arguments for and against insurance playing more of a role in public healthcare. The arguments were weighed against a policy assessment framework of four criteria:
- Efficiency
- Equity
- Financial sustainability
- Feasibility
Mr Hope said, “The question is not whether public or private healthcare should do everything but how we build a system where Kiwis can get the care they need sooner, bring public waiting lists down, and protect more households for when something goes wrong.”
The public and private systems already work alongside each other. The opportunity is to make them work better together.
The report’s other highlights include:
- There is 75% increase in average health insurance claims since 2021
- Over 9% of insured Kiwis terminated their policy in 2025
- 80,770 people ended major medical insurance cover
- Just 35% of adults have private health insurance
- 43% of insured Kiwis access cover through a workplace or group scheme
The report found that life insurance sits at 0.8% of GDP, versus 3.5% OECD average. The Financial Services Council is a non-profit member organisation and represents the financial services sector in New Zealand.