New Zealanders are typically more inclined to safeguard phones and cars than health, incomes or even lives.

However, things are starting to change. Pandemics, cost of living crises and cyclones are – sometimes quite literally – the rainy days that prompt us to think about how we protect ourselves when things go wrong.

The upside is that now more of us are thinking and having conversations about how we manage risk, a sign of positive change in this time of economic uncertainty.

In 2019, the Financial Services Council (FSC) released Risking Everything, a piece of research that looked into New Zealanders’ attitudes to financial risk. Those surveyed were aware of various risks out there, like global risks, natural disasters, loss of income/increase in expenses, illness and death.

‘We might need a plan B’

However, one in three of those who identified these risks didn’t tend to think about how these risks might affect them.

In May, the FSC’s annual tracking survey, the Financial Resilience Index, released fresh data that shows Kiwis may be changing their attitude from “she’ll be right” to “we might need a plan B”.

Research shows attitudes to managing risk are changing, with levels of insurance up from 2022 and many people thinking more about their financial situations.

Silver lining, stormy weather

The deadly flooding events in the first quarter of this year have been one factor in these changing attitudes. Just over three quarters of respondents to the FSC survey said these weather events had affected how they thought about protecting themselves and their families.

• 32 per cent of respondents had thought about it but not yet taken action
• 16 per cent were actively reviewing their financial situation
• 29 per cent had spoken about their financial situation with their family.

This shows there’s been a definite change in attitudes and behaviour. If there’s a silver lining to the horror show that’s been 2020 onwards, it’s that finally we’re starting to have those important conversations and prepare for when the worst happens.

More seek advice

We’re not just thinking about our situation and talking about it with our families; we’re also taking steps to get professional advice.

Financial adviser Elle Wuthrich has noticed an uptake in enquiries and insurance applications recently. “Covid-19 and the changes to the economy have opened up the minds of lots of people to seek advice and protect their health and livelihoods,” she says. “The largest uptake is medical insurance.

“I’m not just seeing individuals sign up, I’m signing up entire families. [They] see the benefits of being fast-tracked so they can receive care quickly and get back to doing what they love.

“Concerns around redundancy have made people enquire about cover and I have had to educate them about how the insurance product works and also how they can self-insure.”

Elle’s observations are supported by the FSC Financial Resilience Index data, which shows an uptick of reported levels of health insurance (5 per cent) and income protection insurance (9 per cent) since 2022.

The balancing act

The main reason Kiwis don’t take out insurance is because they see it as being too expensive (Money and You: Taking Cover, 2022).

Taking out insurance is always a balancing act between forking out money now for long-term peace of mind versus not taking out any cover and being prepared to take a serious financial hit should the worst happen.

It seems that for many of us the past few years have been a real shake-up and harsh realisation that life throws us curve balls from time to time. We’re starting to take less risks when it comes to our incomes, lives and health. We’re having more conversations about risk, reviewing our financial situations, and getting advice from experts on how best to protect ourselves.

If the recent weather events, the pandemic, and the economy (or all three) have caused you to think more about your approach to risk, here are a few tips:

1. Turn that thinking into action: Talk to someone you trust about how they protect themselves and their whānau.

2. Seek advice from an expert: A financial adviser or insurance broker can help you navigate the options and determine the best fit for your personal situation.

3. Review your situation regularly: Our attitudes to risk change throughout our lives, so it’s not a once and done exercise. If you’re renting and have no kids you may only have yourself to think about. But if you own a house, start a family, or get married, your approach to risk may change as there’s more at stake. Take stock of your situation regularly and assess whether you need to make changes.