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2022 Extreme Weather Insurance Claims Near $200m

New claims data released today by the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) shows total insurance payments back to communities for extreme weather events closing in on $200 million for the year to the end of June. Last year set a new annual record for such payments at $324 million.

Today’s new data is that final claims for late March’s floods total $119.6 million (this was preliminarily reported at $79.6 million) and preliminary data for storms across the motu in mid-June total $15.5 million. This brings the running total for the year to $198 million. This excludes $6 million from January’s tsunami following the Tongan volcanic eruption and all claims for July which should be reported on a preliminary basis from late August.

"Communities are once again enduring a hard year", said ICNZ Chief Executive, Tim Grafton. "While we can’t say for sure that we’ll see a new record for extreme weather claims in 2022, that we are seeing a steadily rising trend in climate related insurance costs in Aotearoa and overseas is well established."

The trend is putting a strain on insurers and householders alike. More frequent and severe extreme weather events coupled with soaring building costs and ongoing supply chain constraints are all adding to premiums. So too is the rising cost of reinsurance (insurance for insurance companies in the event of very large-scale events). Aotearoa New Zealand’s private insurers and EQC buy reinsurance from global companies that are themselves seeing record climate-related losses. All of this flows through into premiums.

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"Insurance only transfers risk, it doesn’t reduce it. Communities need to act now through local and central government to build reliance to local risks be that flooding, sea level rise, drought or wildfires. Investment is needed in natural and man-made measurers in order to keep risks at a level where insurance is affordable for both homeowners and insurers alike over the medium to long term," added Tim.

"Thankfully, some communities have been spared even worse damage due to some flood defences performing reasonably well, albeit near their limits. However, they will have to ask themselves if that will continue to be the case as the current trend of intensifying extreme events continues."

 

ICNZ data collection process

1. Once an event has concluded, ICNZ issues a notice to its members to record data for it.

2. Preliminary numbers are available around four weeks after the event after policy holders have lodged claims and initial assessments have been made.

3. Final numbers are reported after around three months once most claims have been settled.

Detailed regional breakdowns are typically not available for events that affect large areas of the country.

WEATHER-RELATED LOSSES - Final Figures

21-29 March 2022 North Island floods

Catergory Claims Value Domestic 7087 $65,420,900 Commercial Material Damage 1939 $39,963,382 Business Interruption/Loss of Profits 111 3,001,751 Marine (including Land transit) 10 $140,583 Marine - Trailer craft 0 $0 Marine - Moored craft 0 $0 Motor Vehicle 733 $7,471,971 Crops 0 $0 Other 93 $3,637,997 Total 9,973 $119,636,584

NATURAL HAZARD LOSSES - Provisional figures

9 -14 June 2022 North and South Island floods

Catergory Claims Value Domestic 2510 $10,551,170 Commercial Material Damage 383 $3,400,309 Business Interruption/Loss of Profits 3 20,446 Marine (including Land transit) 4 $32,681 Marine - Trailer craft 4 $10,826 Marine - Moored craft 0 $0 Motor Vehicle 224 $1,189,749 Crops 0 $0 Other 18 $250,981 Total 3,146 $15,456,162

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