This year’s severe flooding that affected the Auckland region of the North Island of New Zealand is initially estimated to have caused an insurance and reinsurance market loss of around NZ $1.65 billion, according to PERILS AG.
A range of insurance carriers have warned they would likely make reinsurance recoveries because of the severe floods that impacted New Zealand between January 27th and February 2nd 2023.
Tower Limited disclosed that it expects to make reinsurance recoveries for both of the countries recent severe weather disasters, while IAG said it would recover an amount, and Suncorp also released data suggesting a reinsurance recovery was likely.
Now, PERILS AG in reporting on its first-ever catastrophe loss event in New Zealand, has given some idea of the scale of the flooding loss, saying that it was the “costliest weather event for the region’s insurance industry to date.”
PERILS initial industry loss estimate for the North Island of New Zealand flooding is NZ $1.65 billion.
This figure is based on reported loss estimates from the insurance industry, covering the property line of business.
The period in question saw extreme rainfall drive flooding across the greater Auckland Region and surrounding areas on the North Island of New Zealand.
It was fuelled by warm and humid weather throughout the summer which ended in record-breaking rainstorms, causing intense pluvial, fluvial and sewage flooding impacting a large number of insured properties.
An atmospheric river event drove the moist and warm air to New Zealand, which collided with strong easterly winds and triggered the heavy convective rainfall over the North Island, PERILS said.
Darryl Pidcock, Head of PERILS Asia-Pacific, stated, “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.”
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