We all know New Zealand’s weather can be breathtakingly beautiful, but it also brings its fair share of challenges. This year alone has seen some significant events, all of which have contributed to the rising costs of insurance across the country. In this month’s blog post, we explore how these weather events are driving up insurance costs in New Zealand.
Unpredictable and Costly
New Zealand’s weather has become unusually severe this year, with storms, flooding, and cyclones becoming more common. The damage to homes, infrastructure and businesses, has meant insurance claims have skyrocketed and insurers are left with no choice but to adjust their rates to cover the rising costs.
Rising Claims = Rising Premiums
With the surge in weather-related claims, insurance companies are feeling the financial strain. Payouts for property damage, asset losses, and business interruptions have reached new heights. This means that insurers need to increase premiums in order to continue delivering what they do best.
Insurance companies rely on reinsurance, which helps them manage their own risks. However, with the increasing frequency of weather events, reinsurers are facing higher costs, which ultimately trickles down to primary insurers who then adjust their premiums accordingly.
Assessing Risk, Adjusting Premiums
To stay afloat amidst the weather turmoil, insurers must reevaluate their risk assessment models. The likelihood of weather-related events and the potential financial impact on insured properties are key factors in determining premiums. As the climate continues to change, insurance companies must account for these shifting patterns.
While insurance costs continue to rise, it’s important to remember the significance of proactive measures. Investing in resilient infrastructure, sustainable practices, and robust building codes can help mitigate the impact of weather events. By addressing the root causes and adapting to changing conditions, we can build a more weather-ready future.
New Zealand’s weather events are not only captivating but also costly. As extreme weather becomes the new norm, insurance costs are skyrocketing. It’s vital for individuals, businesses, and the government to take steps toward mitigation and adaptation. By investing in resilience and sustainability, we can minimise the impact on insurance costs