The reason why health insurance premiums are soaring
A new report shows medical costs in New Zealand have seen some of the sharpest increases in the Asia-Pacific region and worldwide.
Wednesday, March 12th 2025, 9:45AM 
6 Comments
The 2025 Global Medical Trend Rates Report from Aon measures the percentage increase in medical plan costs per employee — both insured and self-insured — over the past year.
The report provides medical trend rate forecasts for 112 countries and locations worldwide.
According to the report, New Zealand’s medical trend rate surged from 7.4% in 2024 to 14.5% in 2025, marking one of the sharpest year-on-year increases.
Among countries in Asia-Pacific region, New Zealand recorded the second-highest medical trend rate in 2025, behind Kazakhstan in Central Asia at 22%. Other countries experiencing high rates were Papua New Guinea, Thailand and Vietnam.
Globally, the average medical trend rate is expected to be 10% in 2025, following a peak of 10.1% in 2024 — the highest forecasted increase in the last decade.
The report found that Asia Pacific and North America are experiencing the largest projected medical trend rate increases, 11.1% (from 9.7% in 2024) and 8.8% (from 7.6% in 2024) respectively. Notably, these were the two regions with the lowest increases from 2023 to 2024.
“In 2024, there was a larger-than-expected rise in claimable events and procedures, which had a sizable effect on the industry. The long-awaited impact of Covid-19 was also finally felt, as many policyholders caught up on delayed healthcare from 2020 to 2023,” Aon health leader for New Zealand Anson Davies says.
“General inflation has also significantly impacted the cost of medical care, with New Zealand experiencing high levels of inflation across 2023-24. This, coupled with sustained pressure on the public healthcare system, has led more people to seek private healthcare, in turn contributing to medical inflation.”
Looking ahead, Davies suggested, “while current trends remain concerning, a gradual plateau could occur as general inflation recedes, and elective procedures stabilise.”
The report highlights key global drivers of rising medical trend rates, which are:
- Increased demand for prescription and specialty medications
- Innovations in medical technology
- Geopolitical factors impacting supply chains and healthcare costs
- Rising support for emotional health, with stress management and wellbeing initiatives becoming a priority
Wellbeing programs, plan design changes, alternative financing and utilising data and analytics are among the top strategies employers are deploying to mitigate rising costs while promoting a healthy workforce.
“Taking into account these rising medical trends, it's vital that employers, policymakers and insurers collaborate to find sustainable healthcare solutions that balance quality care and cost,” Davies says.
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Comments from our readers
With 900 claims crossing my desk in the last three years, just two have specific links to the vaccine, and one of them is a stretch.
The one case I have that is vaccine injury is heart failure. Pfizer has concurred with this, and everyone around them has responded with the expected support, including ACC.
From an insurance industry perspective, Covid was a public health issue as a primary response, and there has not been a vaccine issue at all.
If there was a vaccine, or Covid, issue in New Zealand, we would have three clear indicators:
1. Overall death rates would be up, they went down.
2. Overall life cover claims would be up, they are not.
3. Trauma claims for cardiac causes would also be up, they are not.
There has been a lot of talk about long Covid impacts, and these are the sort of claims that have been crossing my desk.
Looking at the living benefits, we have seen a distinct spike in two areas of claim: medical claims due to the public health system not coping and disability claims due to mental health pressures.
Even then, the disability one, from what I am being told, is not significant. I haven't had a new mental health claim come to me in a year or two suggesting the reset on how we are living caused by the lockdowns has helped this area dramatically.
An area that has seen a distinct rise is the diagnosis of ADHD, where the lockdowns and isolation have helped these symptoms come crashing through.
While people with ADHD who have made it to adulthood undiagnosed are active and engaged, they generally do ok. It's once that activity drops off, or the being locked up bit hits; the symptom awareness grows massively.
On the spike of medical claims, by and large, they have been routine causes but at three times the number.
This isn't Covid or the vaccine, as the things being looked at aren't impacted by either. It is directly related to the lack of response from public health for specialists and testing. This started when Public Health shutdown for dealing with Covid and it hasn't abated. Much of it is orthopaedic, which isn't Covid or the vaccine.
Long Covid claims I am seeing typically are related to lungs, where people aren't used to having pneumonia and struggle to clear the rubbish out of the bottom of their lungs. Good specialist breathing physio support to sort this out, and all of the people I have seen have fully recovered and got on with life.
So no, there is no evidence that the vaccines have added to insurance premiums. Covid probably has to a small degree, but not at the scale people think.
And internationally there is growing evidence that the C injection was neither safe nor effective.
And yet in NZ we continue to extol the virtues of a Damehood and a Knighthood! There are none so blind as they who will not see.
Been looking, been tracking, and about the only thing that's crossed my desk that could draw a long bow is a 62 year old with early onset of dementia symptoms with a family history of dementia.
I’ve had vaccine injury cases and long Covid too, my own experience with covid was a fun ride too…
With the number of claims across my desk if there was a vaccine issue I would have expected to see it.
With the service contact we have with my clients, I would have expected to hear it as well. But its been crickets.
Others I have talked to that manage client claims are experiencing similar numbers of claims and challenges.
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