Catastrophe loss data aggregator PERILS AG has provided an initial estimate of the insurance and reinsurance market loss from the severe flooding that impacted the North Island of New Zealand from January 27th to February 2nd, pegging the total at NZ $1.65 billion initially.
The industry loss estimate is based on data collected from the New Zealand insurance market and covers the property line of business.
Between January 27th and February 2nd 2023 the North Island of New Zealand was hit by extreme rainfall, causing flooding across the Auckland Region and surrounding areas.
It has become the costliest weather event for the region’s insurance industry to date, PERILS said today.
Fuelled by particularly warm and humid weather throughout the summer, this drove record-breaking rainstorms and intense pluvial, fluvial and sewage flooding, affecting a large number of insured properties.
Four people died in the flood event and several thousand people had to be evacuated following a rare red-alert state of emergency declaration.
An atmospheric river drove moist and warm air masses towards New Zealand, interacting with strong easterly winds that triggered the heavy convective rainfall over the North Island.
PERILS noted that similar rainstorms have occurred in the past, but have generally spared major cities, whereas in this case Auckland was badly hit.
Darryl Pidcock, Head of PERILS Asia-Pacific, commented, “This event is unprecedented being the largest weather- related insurance industry loss historically for New Zealand. It is the third largest Cat event for the sector, only surpassed by the Canterbury Earthquakes of 2010/11 and the Kaikoura Earthquake of 2016. In addition, Cyclone Gabrielle passed through the North Island region only ten days after the North Island Floods, causing considerable damage and leaving many people homeless. For two such extreme weather events to occur within such a short period is unprecedent in New Zealand’s recent history and will test the industry’s existing understanding of these perils.
“This is the first New Zealand industry event loss to be reported by PERILS since we started covering the market in 2019. We hope it will further support the industry’s understanding of extreme weather risk in the region. Our thoughts are with all of those who have been affected by this event.”
Provisional general insurance claims data released by the Insurance Council of New Zealand (ICNZ) showed that insurers had paid around NZ$111 million for the Auckland Anniversary Weekend flood event that started on January 27, 2023 by early March.
A number of carriers said the flooding in New Zealand would drive reinsurance recoveries, including Tower and Suncorp,