Insurers settle record high extreme event claims in 2017

Insurers settle record high extreme event claims in 2017 | Insurance Business

Insurers settle record high extreme event claims in 2017

Insurers have settled 70,000 claims arising from extreme events in 2017. These included claims arising from the Kaikōura earthquake, extreme weather events and residual Canterbury claims, a report from the Insurance Council of New Zealand reveals.

The year 2017 tested the insurance sector’s ability to meet people’s needs at some of the most stressful times in their lives, ICNZ chief executive Tim Grafton said.

“Extreme events such as these create large numbers of claims simultaneously, which really puts pressure on insurers,” Grafton noted. “They need to quickly get resources into regions with heavy losses so people get back on their feet again.”

Claims settled or partially settled by insurers in 2017 include:

  • 39,000 Kaikōura earthquake claims (87% of the total claims received);
  • 25,500 claims from extreme weather events around the country;
  • 2,070 severely damaged homes from the Canterbury earthquakes.

According to Grafton, the Canterbury statistics are especially important, as insurers continued to receive over-cap claims from the Earthquake Commission (EQC), with almost 800 claims transferred in the year to December 31.

The total settlement cost for these events in 2017 was at $2.55 billion, equivalent to paying out almost $7 million every day.

“The private insurance sector has proven its ability to be effective first respondents to these sorts of events, managing and settling claims quickly and effectively. We believe this is the model for the future,” he added.

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