Weather-related losses hit NZ insurers

Weather-related losses hit NZ insurers | Insurance Business

Weather-related losses hit NZ insurers

Weather-related losses in 2019 cost insurance companies $118.8 million, according to the Insurance Council of New Zealand (ICNZ).

With more than 18,000 claims paid to help customers recover from unexpected weather-related events, 2019 was the sixth most expensive year for the industry since 2010.

“What was looking to be a benign year for extreme events changed in the last few months when we saw some extraordinary losses emerge from unexpected quarters, confirming the value of insurance to cover the unforeseen,” Tim Grafton, chief executive of ICNZ, commented.

Read more: Insurance Council warns Kiwis about buying hail-damaged cars

Grafton shared that the Timaru hailstorm made up a huge chunk of last year’s cost, with motor vehicles accounting for the highest number of claims at 9,771– resulting in $56.4 million paid to customers. Home and content damage took the second spot with 6,211 claims, costing insurers $29.6 million.

“[New Zealand seldom experiences] the destructive power of hailstorms, but the Timaru event on November 20 showed us the dangerous effect of these storms when concentrated on urban areas. Costs are currently estimated to exceed $83 million making this the third-largest event for the decade,” Grafton explained.

He added that the recent results reflected the increasing frequency of climate-related events in the country, which may become worse due to climate change.

“Since 2014, we have seen a significant increase in events causing damage in the hundreds of millions. Wider climate research supports the need to adapt and take steps to reduce risk,” Grafton said. “It is clear that we must adapt to the changes we are seeing and take steps to reduce risks where possible to minimise the social and economic cost and impact on us all.”