There has been another significant increase to the insurance and reinsurance industry loss estimate for this year’s severe flooding that affected the Auckland region of the North Island of New Zealand from data aggregator PERILS, with the total rising 18% to almost NZ $2 billion.
The severe flooding struck the Auckland region of New Zealand between January 27th and February 2nd 2023.
Extreme rainfall drove flooding across the greater Auckland Region and surrounding areas on the North Island of New Zealand.
It had been 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 then first reported an initial industry loss estimate for the North Island of New Zealand flooding of NZ $1.65 billion, on March 15th.
Now, updating the total again by 18% to reach NZ $1.995 billion.
Recall that, soon after the severe floods occurred in New Zealand, a number of insurance carriers said they expected to make reinsurance recoveries, with Tower Limited disclosing that it expected 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.
Darryl Pidcock, Head of PERILS Asia-Pacific, said, “This is the first time we are able to provide a detailed industry loss footprint at postcode resolution for a New Zealand Cat event. We believe this dataset is quite unique and together with data on sums insured and rainfall accumulation at identical resolution, it provides a wealth of insight into the event. Understanding Cat risk requires reliable benchmark data, and this is what we aim to deliver through our industry loss footprints.
“The New Zealand insurance industry continues to allocate considerable resources to managing the high volume of claims from this event, as well as complex cases relating to landslide-related damage and some overlap with Cyclone Gabrielle in certain regions. We would like to thank our insurance partners for making available such detailed loss data during such challenging times.”
This was subsequently raised by 25% to NZ $1.925 billion at PERILS next update on that storm.
Because the two weather catastrophe events occurred so close together, the claims process was always going to be challenging for the local insurance and global reinsurance industry.