The Accident Compensation Corporation has paid out on more claims than it expected in the past year, but says it is still in a strong financial position.
In its annual report for 2015/16 - released today - the corporation had a net deficit of $3.4 billion.
It said the deficit was largely driven by a sharp decline in interest rates, and volatility in global financial markets, including the impact of Britain's exit from the European Union.
ACC also accepted nearly two million new claims during the year - an increase of 5 percent.
ACC chair Dame Paula Rebstock said, despite the deficit, the financial position of the scheme remained very strong, with the levied accounts fully funded.
"A deficit of this size does not have the same impact it would have had in the past. That's because the gap between the scheme's assets and liabilities is smaller and the government's new funding policy allows ACC to now look over a 10-year horizon, smoothing any short-term volatility that arises."
Dame Paula said privacy remained a focus, and breaches had reduced from 68 per month to 20 over the past four years.