New Zealand authorities have warned that the flooding in Auckland is likely to worsen after “unprecedented” rainfall in recent days.
On 30 January, New Zealand’s weather authority issued a red heavy rain warning for Auckland and the nearby Northland region for the coming days. The red warning is the highest level reserved for extreme weather events.
An estimated 9.8 inches of rain fell on Auckland on 27 January alone, making it the city’s wettest day on record.
Major insurers operating in New Zealand including Insurance Australia Group and Suncorp Group have so far cumulatively received over 9,000 claims so far following severe storms and flooding in and around the biggest city, Auckland.
As of Monday morning (30 January), Suncorp’s Vero and AA Insurance brands said they have received about 3,000 claims, while IAG’s AMI, State and New Zealand Insurance brands have fielded over 5,000 claims.
On 29 Jnauary Tower said it had received over 1,000 claims since Friday, and noted losses were “substantial”.
“This is a very significant event which will result in a lot of claims,” according to the Insurance Council of New Zealand.
At least four people have lost their loves in the floods and landslips that have hit Auckland over the past few days, with widespread damage caused. A state of emergency remains in place in the city of 1.6 million.
The National Institute of Water and Atmospheric Research (NIWA) said in a tweet that Auckland has now recorded more than eight times its average January rainfall and 40% of its annual average rainfall.
IAG noted it was too early to determine the financial impact of the floods, and it may review the A$909 million ($645 million) in natural peril costs it has estimated for fiscal year 2023, once the situation becomes clearer.
Suncorp said losses from this event will be capped at NZ$50 million ($32.4 million) as its reinsurance programme provides additional protection for New Zealand losses.
Citi in a research note observed that IAG’s exposure to the floods in Auckland, which could be potentially as much as A$236 million, is “much greater” than Suncorp’s NZ$50 million cap.