Insurers pay over one-third of $3.18bn NZ floods & Cyclone Gabrielle claims: ICNZ

According to the Insurance Council of New Zealand, insurers have now paid $1.08 billion of an estimated $3.18 billion of claims after the two climate disasters that affected the country this year, the Auckland Anniversary Weekend floods and Cyclone Gabrielle.

In total, more than 107,569 claims have arisen from the two climate or weather related events and the total industry loss is now higher than other recent major weather and catastrophe events experienced in New Zealand, the Council said.

For comparison, New Zealand’s general insurance sector paid out $3.08 billion in claims over the full-year 2022, while claims for 2016’s Kaikoura earthquake totalled $2.27 billion.

“While we are pleased that good progress is being made, with 35% of claims already fully settled (34% by $ value), we said in February that many of the more complex, claims would take many months, and some over a year or more, to complete,” explained Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) Chief Executive, Tim Grafton.

The ICNZ estimate of $3.18 billion in claims for the flooding that occurred in the Auckland region of the North Island and for Cyclone Gabrielle, falls short of the industry loss estimate issued by PERILS.

Recall, PERILS has issued updated estimates for both loss events, saying that the Auckland floods are now estimated as a NZ $1.76 billion industry loss, while Cyclone Gabrielle is estimated at NZ $1.925 billion, for a combined total of almost NZ $3.7 billion.

So, the ICNZ figure may only be focused on its domestic insurance market, or is simply an estimate based on insurance claims filed and so could have some way to run higher.

“There is much yet to be done. For some customers there is a long road ahead while they work through the categorisation process with their council. Insurers are committed to standing by their customers until all claims are settled,“ added Grafton.

Claims are relatively evenly split across the two loss events, with 55,433 filed for the flooding and 52,136 for Cyclone Gabrielle.

The estimated cost of claims is almost $1.66 billion for the flooding and $1.52 billion for the cyclone losses.

As we’ve reported, both of these events have driven reinsurance recoveries for local NZ insurers, as well as for some of the Australian majors that operate there.