New Zealand insurers must ensure their products remain relevant and widely purchased as the nation’s population changes, IAG NZ CEO Jacki Johnson says.

Data shows insurance market acceptance is much higher among people with European backgrounds than those from the Asian or Pacific regions.

“We very proudly say we are the most highly penetrated insurance market in the world [in] property insurance but if you break it down by ethnicity it doesn’t show that in certain pockets of our population,” Ms Johnson told the Insurance Council of New Zealand (ICNZ) conference last week.

For people with a European background the penetration rate is about 88%, while for those from Asia – a growing proportion of the nation’s population – it is about 55%, she says.

An ageing population, smaller families and shifts in where people live will also create challenges, the conference heard.

Ms Johnson, who is also president of ICNZ, says high participation rates are important for the small New Zealand market to retain its global relevance.

Improving risk literacy to help consumers understand the importance of insurance is vital, particularly amid concerns about affordability.

“We have to try to help educate people about true risk, without panicking a whole community, but in a way that helps explain that affordability is not just about the household income,” she said. “It’s about: can you afford to face something that is likely to happen and you don’t have cover?”