Swiss catastrophe data firm Perils has lifted its loss estimate for the New Zealand flood catastrophe that struck Auckland and neighbouring regions in late January to $NZ1.754 billion ($1.64 billion). 

That’s up from a March estimate of $NZ1.65 billion ($1.53 billion).

The team observed an increase in the industry loss of 6%, Head of Perils Asia-Pacific Darryl Pidcock says, and insurers were experiencing “difficult and challenging times”. 

“Insurers are not only managing a high volume of claims for this event but face the added pressure of responding to Cyclone Gabrielle claims which occurred less than two weeks after the floods,” Mr Pidcock said. “There are added complexities given the overlap in some regions.” 

Cyclone Gabrielle passed through the North Island region only ten days after the record floods. Both events were unprecedented for the New Zealand insurance market and far exceed previous records for weather-related losses, excluding earthquake.  

Gabrielle affected the entire North Island, while losses from the January floods were concentrated in the greater Auckland Region, New Zealand’s most populated metropolitan area with 1.7 million people.  

Intense rain over the city on January 27 and again on February 1 overwhelmed drainage capacities and led to pluvial and fluvial flooding which damaged a large number of insured properties. The record rainfall amounts were driven by a pronounced atmospheric river which brought moist and warm air masses to New Zealand which collided with strong easterly winds that triggered the heavy convective rainfall. 

It was fuelled by unusually warm and humid weather throughout summer which culminated in record-breaking rainstorms. Previous similar rainstorms have spared major cities but in this event Auckland was severely impacted. 

The flood estimate covers the property line of business and is based on loss data collected from the majority of the New Zealand insurance market. The next update will be issued in August. 

The floods are the first New Zealand insured loss event reported by Perils since it started covering the market in 2019.