New Zealand Insurance Industry Failing to Meet Māori Needs, Market Watchdog Says

New Zealand’s insurance industry is failing to consistently meet the needs of Māori, with affordability barriers and difficulties insuring collectively owned land leaving them less likely to have cover, according to a study by the market watchdog.

The Financial Markets Authority research published Tuesday in Wellington found that 17% of the more than 950 Māori who participated in the study experienced problems with insurance in the last two years, which is almost twice the rate found in a similar survey of the general population.

“Current insurance settings do not accommodate whenua Māori and multiple or collective ownership and ways of living,” Hannah Chapman, the FMA’s strategic adviser Māori, said. “Participants also raised concerns about valuation, replacement costs and whether insurance products adequately reflect actual risk and cultural and intergenerational value.”

The FMA oversees New Zealand’s financial markets and has identified significant knowledge gaps in the insurance sector about the experiences of Māori consumers and providers. Māori are less likely than the general population to have car, house and health insurance.

The research, led Lara Greaves, a political scientist at Victoria University of Wellington, is part of the regulator’s work to address the knowledge shortfall and enable Māori to participate fully in New Zealand’s financial markets.

Affordability was identified as a key barrier, with 82% of participants agreeing that people do not have enough money for insurance costs. Many said the cost of insuring Māori taonga, or treasures such as carvings and woven panels, was particularly high.

The research also found significant levels of distrust stemming from experiences of racism and bias, as well as broader mistrust of the insurance system linked to colonization and related power dynamics.

“Some also shared the view that certain insurance providers may intentionally design complex processes, leading to customer fatigue,” the research found.

Climate-related insurance pressures were another prominent theme.

“Māori communities are over-represented in locations exposed to flood, coastal erosion and other climate hazards, partly as a function of the historical geography of land return and partly as a function of where whenua connections have always been,” the report said.

Among the solutions identified were increasing the number of Māori financial advisers and providing more culturally appropriate information.