A report from the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) confirmed that 2022 set a record for climate-related extreme weather general insurance claims, with the figure reaching $351.2 million. This comes following the establishment that this 2022 figure has already been outdated by the two climate disasters that hit Aotearoa earlier this year: the North Island floods and Cyclone Gabrielle.
The ICNZ said that last year also marked the third consecutive year wherein a new record was set. In 2020, the sector recorded $274 million in claims relating to extreme weather events, while 2021 recorded $324 million.
In a news release, ICNZ chief Tim Grafton said that while this new record is already obsolete, it should not detract from the fact that there is a clear pattern of rising climate claims in what many would consider “normal years.”
Grafton said that New Zealand was already facing three challenges arising from the well-established trend of climate-related extreme weather events becoming more severe even before the North Island floods and Gabrielle hit this year.
“While insurance is there for many people and assets, the first issue is the risks and losses associated with people’s safety and the environment. Then, as we saw throughout 2022, and into this year, there are the under- or uninsured losses to property, businesses, farm infrastructure, land, crops, orchards and livestock, to land of cultural significance and the risk of community breakup following a major event and all the social and economic hardship that comes with that. This is not just about insurance,” Grafton said.
Grafton said that the ICNZ numbers do not capture the full financial costs of such events. The calculations do not consider EQCover payouts and the cost of fixing critical infrastructure like damaged roading, waters, telecommunications, and energy systems, all of which are typically more expensive than reported general insurance claims.
Grafton stressed the urgency of making New Zealand communities much more resilient to extreme weather events. As the country started to face the outcome of the devastating storms a few weeks ago, Grafton called upon Aotearoa to build back better for a more resilient nation in the face of climate change.
“While the focus is on much more recent disasters, they are exceptional events within a well-established trend. We must look beyond Auckland and Hawke’s Bay and prepare the nation for what we know accelerating climate change will bring,” Grafton said.
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