The first tragedy to unfold – major floods that hit the North Island from 27th January to 2nd February – is expected to cost the insurance industry over $1 billion, with $111m in insured losses already being paid. So far, about 47,300 claims have been lodged in relation to the floods, the majority of which cover house and contents claims valued at around $565 million, with a further $320 million in estimated losses for commercial claims.
At the same time, around 30,000 claims have been lodged due to Cyclone Gabrielle – the deadliest system to hit NZ since Cyclone Giselle in 1968 – which hit NZ less than two weeks after the floods, from February 12th – 16th.
“What we're talking about is these two events exceeding the record year for insured losses for extreme weather events and we've got ten months of the year to go. It is huge,” ICNZ CEO, Tim Grafton, said.
ICNZ’s Consumer Affairs Manager Sarah Knox was also quoted as saying that it would be years before all of the flood damage claims were settled, given the unprecedented scale of the floods.
These events are expected to create further challenges in an already distressed Property insurance market. Insurers have been imposing premium rate increases across their portfolios over the past several years following several catastrophic weather events worldwide, causing billions of dollars in insurance losses. And while some positive signs came out of the market that conditions had started to stabilise towards the back end of 2022, these latest tragedies will undoubtedly be another major setback for insurance buyers going forward.
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