"The property insurance market will become significantly harder"

Anyone hoping for the property insurance market in New Zealand to start easing is perhaps just setting themselves up for disappointment – not only is it poised to become harder, but also considerably so.

“In 2023, it is anticipated that the property insurance market will become significantly harder,” noted Aon New Zealand in its latest Insurance Market Insights report. “The combined effects of the Auckland Anniversary Weekend flooding and Cyclone Gabrielle have left local insurers dealing with the most significant weather events in New Zealand’s recent history, with significant commercial, rural, infrastructure, and domestic losses.

“The two main insurers, Suncorp and IAG, have both had to fully reinstate their treaty reinsurance only two months into their annual policies.

“This is in addition to the past two years which saw insurers experiencing an increase in the number and severity of natural catastrophes, large commercial fires, and general claims costs, which are being further impacted by inflation and supply chain constraints.”

Initial provisional estimates from the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa in terms of natural catastrophe claims this year, under the commercial category, stand at $672.5 million as of March 23 – a massive surge from last year’s more than $100 million and 2021’s $95 million.