IAG, New Zealand’s biggest general insurer, says more people than ever are thinking about climate risks when buying and renting homes as climate concern around properties rises.
This is according to new findings from IAG's latest biannual Wild Weather Tracker, which reports on the weather-related claims the insurer has received every six months.
IAG operates the AMI, State, NZI, NAC, Lumley and Lantern brands and also provides general insurance offered through ASB, BNZ, Westpac and The Co-operative Bank.
In the latest tracker report and survey IAG said it had found over 53% of home buyers and renters now consider climate risks as their second most important consideration when it comes to looking at property after price.
Additionally, whereas only 55% of respondents would have considered weather risks two years ago when looking to buy or rent a property, IAG’s survey found that percentage has now risen to 86%.
IAG chief executive Amanda Whiting said climate concern and natural hazard risk was currently “well and truly front of mind” for New Zealanders.
“Issues like flooding are now impacting people’s behaviour around where to buy and rent. People have seen the devastation wrought by storms like Cyclone Gabrielle and are much more aware of the risks,” she said.
Even though much of New Zealand enjoyed a relatively calm summer, IAG said it had still received 6,712 weather-related claims between the beginning of September 2023 and the end of February 2024.
This is 84% fewer weather-related claims than the same time last year when the insurer received 41,596 claims from the Auckland floods and Cyclone Gabrielle. IAG has reported since then that it paid out more than $1 billion in claims from those events.
During the six months to the end of February 2024, Canterbury bore the brunt as the most weather-affected area and made up 37% of the claims that IAG received during that period. IAG said the claims were predominantly from storms and strong winds.
After Christchurch, Wellington accounted for 19% of claims, Auckland 9% and Otago 6%.
IAG said the majority of the 6,712 weather-related claims it received during the September to February period were from house policies.
The insurer reported 4,192 house claims, 603 car claims, 969 contents claims, 920 commercial claims and 28 claims under the ‘other’ category.
Whiting said New Zealand was facing “growing risk” as weather became more unpredictable alongside other natural hazards.
“This means claims are becoming more frequent and costly, compounded by inflation, which has led to premium increases. However, we don’t expect to see the same level of increases year on year,” she said.
IAG’s survey found 79% of respondents wanted councils to provide more information on weather and natural hazard risks for properties, followed by real estate agents at 57%, the government at 52% and insurers at 41%.
Additionally, 90% expressed a strong desire for increased public availability of information regarding hazard risks.
“This is why it’s important we continue to work closely with councils, the government, and other partners to ensure insurance remains accessible for New Zealanders,” Whiting said.
“Our focus must be on keeping people out of harm’s way, so we do not see a repeat of what happened during the summer of 2023.”
In its last wild weather report released in November 2023, Whiting had urged the then incoming government to prioritise natural hazard risk in order to keep insurance affordable.
46 Comments
Its always been a key rule to not buy down off the road, don't buy close to a cliff top and don't buy in flood prone areas. This rule now applies more so than ever given climate change and what NZ wen't through last year with the floods and cyclone.
We never understood why our (rural) neighbour bulldozed an old house that was on piles but still had moss growing on the Northern walls, then built a much larger house on a concrete slab, below the road, with a driveway that aimed road runoff directly into his garage. The house sits on part of a prehistoric lake bed and It was the only one in the area that was inundated during the cyclone, no one suffered any water ingress. If he'd built it 40m closer to the road it would have been on the prehistoric lake shorefront and would have been fine.
Agree. Still amazed the asking and prices the beachfront houses get when clearly there is no longer a beach, its a erosion slip face.
Quite.
Only this morning my better half sent me link to a lovely beachside cottage to look at.
The first picture showed that the beach had eroded the land to just in front of the fence the current owners had erected, their land according to the map however stretched several metres into what was now simply sand.
Within 10 years that property will either be underwater, or the lovely view will be replaced with a large sea-wall.
Or, of course, some will convince the government of the day to 'compensate' them and buy-back the property...
You can rent something if you dont want to buy. Avg-man wants to buy but wont meet the market
Thanks for the plug.
For clarification the AvgMan would like to buy, but more importantly does not NEED to buy. Meanwhile continues to build other cash producing investments, loading up the cash cannon and waiting for targets of opportunity. Prices are in decline ever downwards and FOMO is dead. Mortgagees are on the rise.
Popcorn.
Whats selling within your area of interest. Of course you can always say here you scored a good bargain even if you pay too much
You are one in a declining class of forward thinkers.
When you get a LIM you get the geo-tech data in regards to flood-zones etc. This has been in place for years now in the main centres, not sure this is a new assessment criteria?
I also wonder why the Actuaries who run the books cannot make the case for proactive flood-defence spend by these insurers. Maybe an insurance bond with local house owners? They promise to pay CPI-adjusted premiums for a period of time and the Insurer invests in local flood defences?
Certainly risk-adjusting premiums must be a lottery at the moment.
"which has led to premium increases"
“This is why it’s important we continue to work closely with councils, the government, and other partners to ensure insurance remains accessible for New Zealanders,” Whiting said"
Oh my god, it's going to rain and we need to put your premium up 35% next year in case. I mean, I know there were 84% fewer claims last year but we are working to support you and really want to keep insuring you because the weather is so unpredictable now because of climate change and and and
Our business is getting riskier and the government(s) need to do something about it!
Socialism everywhere.
Is it really getting riskier though?
Hilarious how they crank the premiums yet the govt are stepping in for some of the worse hit areas, effectively saving the insurance companies. Seems like every darn sector is trying to squeeze every last drop out of us these last couple of years just because they can.
I can see the insurance industry is going to milk the climate thing for all it's worth. Great time to buy their stock if none of their predictions come to fruition.
They are seeing all of their concerns coming to fruition. Hence their refusal to accept money for insurance in an increasing number of circumstances.
Nothing stopping all the climate change septic/deniers pooling together and setting up their own insurance companies to undercut the ones that are 'milking it'. Put their money where their money where their mouth is.
I'm sure a bunch of average joes ganging together are going to be able to undercut a trillion dollar global industry plus there will be no doubts that the mortgage issuing big banks will accept your hobby scale efforts at insurance
Once multinational corporates bought into the fake ESG agenda as a way of making more money off ordinary punters plus grabbing those investment funds which had also bought into the ESG agenda the whole thing became a corrupt money making scheme. Like the people who think EV's are going to save the environment - when in reality corporates like BHP love EV's and the new mining opportunities that they present.
But the predictions are already coming true. Remember the bad weather last year?? I can’t understand intelligent people who won’t accept what the world’s scientists are telling us about science
Esk valley folk reported the rain wasnt the problem, it was the stop banks that gave way that caused all the flooding.
That's rather inconvenient to the climate catastrophe narrative, including the fact that the local authority should have been monitoring water way levels after 9pm that night but were clearly tucked up safely in bed instead.
I can't understand intelligent people being so easily taken in.
Perhaps intelligent poeple are rarer than you think or perhaps its not intelligence that a problem its using the intelligence but in NZ the view is - itll be alright mate.
says more people than ever are thinking about climate risks when buying and renting homes as climate concern around properties rises.
so this is just a perception of the renters and home owners, not necessarily reality of facts. my cynicism tells me insurance company will use this fear in people to put up premium.
In the absence of any true competition in the sector, then they'll continue to do so.
A duopoly with the façade of competition through various resellers.
Here in Brisbane, my house insurance jumped from $2800 per year to almost $14000 due to the flood risk. Our area has never been flooded in the past, incl the major events in 1974 and 2011. Except in Feb 2022, we had so much rain in 3 days (over 860mm) and we ended up with 30cm of flood water in our living area.
Lucily the govt are paying for us to raise our house up 1.5 meter, that is 1.2m higher than the last flood level, and hopefully this will bring the insurance premiums back down to some sensible amount.
The old history of flooding is irrelevant, the new history started in Feb 2022. The 1 in a 100 year events are turning into 1 in 10 year events or even 1 in 5. $14,000 is horrendous I would be moving out.
That's the plan..Once it's raised, hopefully it'll be done before October at the cost of $152k, and I only had to contribute 2k.
We will be selling high, buying high.as real estate in brisbane is going crazy at the moment,
Wow - 1.5 meters. Does that mean you have to re-do all the indoor/outdoor flow, e.g., new patios/decks, stairs, etc. Are govt paying for that as well?
What a nightmare. Good luck for the 'lift' and hope you get the re-sale price you are hoping for!
The 1 in a 100 year events are turning into 1 in 10 year events or even 1 in 5.
This is such utter nonsense only young people and those whom in another century were sporting "the end is nigh - repent" sandwich boards would believe it. Look back at the worst NZ floods of the 19th and 20th Centuries and what we have now is just on par. Developers and local authorities building on known flood plains (and subsidence zones) accounts for most of the perceived extra damage. Erosion isn't a phenomenon which just started with "climate change" you know.
The taxpayer is paying for your house to be raised?
That's amazingly generous.
Yes, they are paying up to 150K for raising; 50K for retrofit if it can't be raised or 100K for total rebuild.
It's a joined funding between QLD state Govt and Federal.. Funding amount is around 800 mils and regardless whether it's owner-occupied or investment property. There are 3 in our street being raised at the moment and owned by same person.
Ironically because the Queenslander house style fell out of favour when it does not maximize the rental return potential per sqm and is more costly to build. So more risk prone designs were used in areas still susceptible to flooding (even rare flooding over a century is still at risk of flooding given the land and water drainage profiles).
Absolutely shocking. I would like to know the difference the insurance industry is claiming reinsurance is rising vs what they are now raking in in increased premiums. Based on their recent earnings reports, they're doing very nicely.
So did you pay up or not insure or do something innovative?
60% of the Rainforest is in Brazil, they just got a reminder as to why they need to stop cutting it down.
Sorry mate but the developing world is tired of the advanced western world (which got rich and powerful exploiting the resources and energy from poor countries for the last two or three centuries) telling it what to do.
Its going to be about location, location, location going forward in relation to elevation. I suggest people look at their GPS for the height above sea level and the surrounding sloping land into their property when they look at a new house. Elevation was high on my list, the house is 125m above sea level.
Plus, slopes and drainage.
If you have a property (or multiple) on a slope above you and their drainage simply dumps water on your property that's a problem.
Or even worse, they have such bad drainage that their land is compromised - meaning water, land and even house could pass down the hill through your property.
Having said that, all in all purely from a climate change event, an elevated house is far preferable to one on a beach.
Of course in NZ there's also things like earthquake risk, watertightness, compromised land, volcanic tunnels beneath cities etc etc.
Australia has a classic house design from early 2 centuries ago (The first houses with a distinctively Queenslander style appeared in the 1840s) that would have a 2 story property with the first story solely being the stilts and what would be flood depth and the second story being the main house & living areas. I assume the lower levels on many have been closed in and developed to second living rooms, more bedrooms etc now but the property design was that flood heights could be over 2m.
What NZ lacked the most, and still does was sensible architecture design for our areas.
After the ChCh quakes when I lived in Cashmere on the hill two local properties survived rather well - an Historic stone House - no visible damage and still used then Princess Margeret Hospital circa 1953 brick builtstill used today except for parts with Asbestos. The builders of the Stone house and PMH certainly knew things we have failed to understand and follow, so much for council rules and moder engineers - did I mention the CTV building that collapsed in the quakes??
Been watching property videos out of Florida over the past weeks. If you think it's bad here, it's nothing compared to what's happening over there.
Bad in what way? Weather events destroying property or premiums going up to account for weather events potentially destroying property?
This is not a new thing or a new concern. This has been a cornerstone of due diligence for centuries before the major drivers for anthropogenic climate change.
Does it affect those who are ignorant of due diligence more? No. In fact they have always been at risk and faced risks and we have several huge centuries past gone examples. It is where each person defines acceptable risk and those cliff top properties have always been at a premium with more then a little falling to the sea generation after generation until the next generation cuts the losses and cannot get anymore blood out of the lost stone. Wealth can accept and weather more risk and the choice is up to them. The poor are restricted in their choices and are often forced into areas of higher risk, with events often leading to intergenerational destitution.
The insurance companies want their money back from last year and they're using climate alarmism to do that.
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