Thursday, 15 February 2018

The cost to NZ insurance from extreme weather events

Extreme weather events in 2017 cost insurers $2.5 billion

New Zealand insurers settled a record 70,000 claims totalling more than $2.5 billion from extreme events in 2017.

15 February, 2018

These included claims arising from the Kaikoura earthquake, extreme weather events and residual Canterbury earthquake claims.

Last year insurers settled or partially settled 39,000 Kaikoura earthquake claims, or 87 per cent of the total claims received after the magnitude 7.8 quake in November 2016.

They also settled or partially settled 25,500 claims from extreme weather events around the country, and claims for 2,070 severely damaged homes from the Canterbury earthquakes.

"The Canterbury stats are especially important, as insurers continued to receive over-cap claims from EQC. Almost 800 claims were transferred in the year to 31 December," said Tim Grafton, Insurance Council of New Zealand chief executive.

"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," Mr Grafton said.

He said 2017 was a year that tested the insurance sector's ability to meet people's needs at some of the most stressful times in their lives.

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

The total settlement cost for the extreme events in 2017 was $2.55 billion, equivalent to paying out almost $7 million a day.

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