News eDaily09 May 2017

New Zealand:Nat CAT claims may have exceeded US$69 mln so far

09 May 2017

Insurance claims relating to natural disasters may already have exceeded NZ$100 million (US$69 million) so far this year after a raft of cyclones and major storms hit the country in March and April.

The cost of March's Tasman Tempest storm alone was NZ$42 million while costs for Cyclone Debbie and Cyclone Cook are expected to run into the tens of millions and combined exceed the March storm, reported NZ Herald.

In comparison, excluding last November's Kaikoura quake (which has yet to have a final cost put on it) natural event claims for the whole of 2016 were NZ$51.7 million, according to the Insurance Council of New Zealand.

Two insurers say it is too soon to predict whether a spate of bad weather events will push up premium prices in flood hit areas.

Mr Brendan McGillicuddy, home national portfolio manager for IAG, said insurance premiums already factored in weather events and a single extraordinary event was unlikely to substantially affect future premiums. IAG is the country's largest insurer and its brands include State Insurance, AMI, Lumley and NZI.

But he said that certain weather events could highlight particular risks associated with flood prone locations which the insurer may not have previously known about. This could affect premiums, he said.

"This may give rise to more targeted increases in pricing to reflect the higher risks associated with certain locations and in some instances can lead to special terms or conditions applied to policy coverage such as higher excesses or more restrictive cover.”

A spokeswoman for AA Insurance said it did not plan to increase premiums as a direct result of the major weather events but other factors were likely to drive a price increase over the next year.

"We know that these types of weather events are expected to occur each year, and so they are already factored into our premiums.

A spokeswoman for the Insurance Council of New Zealand said individual insurers may respond differently depending on their appetite for risk and how they price that risk.


 


 

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