New Zealanders are challenging insurance and financial service decisions in record numbers, with the Insurance & Financial Services Ombudsman Scheme reporting an unprecedented workload over the past year.
The IFSO Scheme handled 3,977 cases in the year to June 30, 2026, including 2,602 complaints, and concluded a record 833 formal dispute investigations — up 46 percent on the previous year.
The latest figures continue a sharp upward trend. Disputes have increased by almost 190 percent over five years, with Insurance and Financial Services Ombudsman Karen Stevens pointing to continuing financial pressure on households as one likely factor. Previous IFSO reporting has also linked increasing disputes to cost-of-living pressures and consumers’ expectations about what increasingly expensive insurance policies should cover.
Insurance dominated the caseload, accounting for more than 92 percent of disputes accepted for investigation.
For the first time, health insurance became the largest category of disputes investigated, jumping 91 percent and overtaking both house and motor vehicle insurance. Many involved exclusions, eligibility for benefits, policy limits and changes to policy terms.
Travel insurance disputes were also up 32 percent, with some complaints arising from Middle East conflict and associated travel disruption.
The Ombudsman is also seeing another emerging factor — artificial intelligence. Consumers are increasingly using AI to help prepare complaints, but the IFSO Scheme has previously warned that AI can misinterpret policy wording, rely on overseas information or even generate nonexistent cases. In some instances, AI-assisted complaints have stretched to hundreds of pages.
Despite record demand, the Scheme says disputes were completed in an average of 46 days, with more than $1.39 million in payments to consumers recorded during the year.
The message for whānau is straightforward: know what your policy actually covers — and, just as importantly, understand the exclusions before you need to make a claim.
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