Body
InsurTech is composed of the words “insurance” and “technology”. It is used as a collective term for the application of modern technologies in the domain of insurance services.
Digital and mobile brokers: FinTechs belonging to this category mostly act as digital insurance brokers and provide users with an overview of their insurance contracts with their respective conditions. Some FinTechs offer very short-term insurance contracts to cover specific cases which can be concluded often spontaneously via mobile devices. Oftentimes additional consulting services are offered.
Internet of things: FinTechs belonging to this category collect data by measuring for example the driving style of the customers or through wearables the customers wear to consult on, offer and/or manage the customer’s insurances.
Introduction
Attitude of the country towards InsurTech-services
There is a recognised need for innovation in the insurance space in New Zealand. A 2024 study from Deloitte reported New Zealand’s insurance is at crossroads, with insurers being weighed down by legacy systems while InsurTech’s are gaining market share while being hindered by capital scarcity and inability to gain traction due to the industry being slow to adopt new tech..
The risks for insurers supplemented with the requirement for transparency under New Zealand's regulatory framework has and continues to create opportunities for InsurTech. Particularly, in relation to data and analytics. The consensus is that collaboration between InsurTech’s and insurers is key for a market that is seen as falling behind in the global context.
Legal affairs
Obligations and requirements to provide InsurTech-services
While there is nothing InsurTech specific within New Zealand legislation, insurance providers (digital and mobile brokers included) are subject to supervision by RBNZ and licensing requirements pursuant to the Insurance (Prudential Supervision) Act 2010 and its associated laws and regulations.
In instances where the InsurTech services involve supplying insurance (digital and mobile brokering for example) the provider must register as Financial Service Providers in accordance with the FSPA with the associated costs as outlined in our section titled FinTech.
A Financial Advice Provider Licence must be obtained. Licence application fees range from $703.80 to $1,060.30 depending on the relevant class relating to the application. An assessment is required, and additional fees may be imposed subject to the length of the assessment.
Further, would be insurers must apply to RBNZ for a licence. As at the date of writing, the application will incur a fee of $960.25. If successful, there is an annual confirmation fee of $75 (plus GST) and an FMA levy, which is dependent on how many classes under which the provider is licensed as a financial service provider.
Additional comments regarding the legal situation for InsurTech-services or what InsurTech’s must be aware of in this business area