PERILS released 3rd insured loss for the North Island of New Zealand floods

PERILS has released the third loss estimate for the floods across the North Island of New Zealand which occurred during the period of 27 January to 2 February 2023.

The updated industry loss figure is NZD 1,995mn and is based on detailed loss data by postcode and property line of business collected from the majority of the New Zealand insurance market.

This compares to the figure of NZD 1,650mn issued by PERILS in its first loss report six weeks after the event, and NZD 1,754mn issued by PERILS three months after the event.

The figure is composed of personal lines property losses which represent 69% and commercial lines property losses representing 31% of the total industry loss.

In March PERILS has estimated New Zealand insurance market loss for the floods up to NZD 1,650 mn ($1 bn). In line with the PERILS event definition for New Zealand, this loss number covers the property line of business.

In line with PERILS’ standard reporting process, this third loss report provides a detailed breakdown of property losses by postcode (high-resolution CRESTA Zones), with the data further divided by residential and commercial lines, and loss amounts split into buildings, contents and business interruption losses where available.

In line with the PERILS reporting schedule, an updated estimate of the market loss from the North Island Floods will be made available on 2 February 2024, twelve months after the event end date.

 It is complemented with postcode-level rain accumulations. In combination with the PERILS Industry Exposure Database, available in identical resolution, the industry loss footprint provides a wealth of data to help better understand the flood vulnerability of insured property in the region.

Insurance industry loss footprint of the New Zealand North Island Floods

Insurance industry loss footprint of the New Zealand North Island Floods
Source: PERILS

From 27 January to 2 February 2023 extreme rainfall caused severe inundation across the greater Auckland Region and surrounding areas on the North Island of New Zealand. The city of Auckland (population 1.5 million) was particularly affected.

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.

Darryl Pidcock, Head of PERILS Asia-Pacific

The event was fuelled by extraordinarily warm and humid weather throughout the New Zealand summer which culminated in record-breaking rainstorms.

These caused intense pluvial, fluvial and sewage flooding which affected a large number of properties and severely impacted vital infrastructure in and around Auckland.

Insurance industry loss footprint of the New Zealand North Island Floods

Four people died in the event and several thousands were evacuated, following a rare red-alert state of emergency declaration.

Understanding Cat risk requires reliable benchmark data, and this is what we aim to deliver through 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.”

PERILS industry loss estimates provided via the PERILS Industry Loss Index Service can be used as triggers in insurance risk transactions such as industry loss warranty contracts (ILW) or insurance-linked securities (ILS).

Edited by Nataly Kramer   Nataly Kramer