Weather bombs hit premiums
Insurance claims reached a record $242 million this year due to the effects of climate change, the Insurance Council says.
The record high has insurance industry heavyweights predicting premiums ‘‘may well go up’’.
Insurance Brokers Association of New Zealand chief executive Gary Young said commercial premiums could rise more than residential, but both may increase.
‘‘Overall the market may well go up, but it’s more likely to be seen in the commercial-type area than on homeowners I think.’’
Insurance Council chief executive Tim Grafton said the losses were a ‘‘clear sign of the impact climate change is having‘‘.
‘‘As time goes on, we expect to see more of these sorts of extreme weather events occurring.’’
By contrast, last year’s extreme weather cost insurers $42.6m.
Reinsurers, which are companies that insure insurance companies, found profits significantly affected by global events this year, including hurricanes in the United States and the Caribbean and earthquakes in Mexico.
Young said it was ‘‘very hard to tell’’ how much premiums would rise but the prevalence of earthquakes and floods in New Zealand would have a bigger impact than the rise in global disasters.
‘‘I think overall the market will reflect the increases [from reinsurers] but it could be at least a month away,’’ he said.
The most expensive weather event was Cyclone Debbie, which left $91.5m worth of damaged property in its wake.
Floods in New Zealand also racked up a big bill.
Insurers paid out $94.6m to 11,455 claimants for flood damages throughout New Zealand.
Victoria University climate science expert Professor James Renwick said that, as the atmosphere got warmer on average due to climate change, more moisture entered the air, which resulted in heavier rainfalls.
He said the floods in March and April were caused by subtropical systems that came from northwest and east of New Zealand.
‘‘Definitely if there’s any part of the business sector that’s keen to study the science of climate change, it’s insurance.’’