Data released by the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) says that total insurance payments for extreme weather events is already nearing $200m in H1 2022.
This compares to last year, when a total of $324m was paid out—an annual record at the time.
This new data shows that final claims for late March’s floods total $119.6m (this was preliminarily reported at $79.6m) and preliminary data for storms across the motu in mid-June total $15.5m. This brings the running total for the year to $198m. This excludes $6m 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.
Tim Grafton, chief executive of the ICNZ, said: “Communities are once again enduring a hard year. 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 ICNZ said in a statement that the trend was putting a strain on insurers and householders due to more frequent and severe weather events alongside soaring building costs and supply-chain issues.
Grafton added: “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.”
He went on: “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.”
These latest figures follow reports a few weeks ago that secondary perils were persisting in Australia and New Zealand.
Back then, Reinsurance News reported that following years of large catastrophe losses, and the record-breaking floods of February and March 2022, June and July renewals were a market-changing event for Australia.
This means that Australia and New Zealand, at the forefront of climate change, are now key markets for catastrophe risk (the fourth largest for catastrophe reinsurance demand globally, just behind Japan).