Jan 30 (Reuters) – Major insurers operating in New Zealand, including Insurance Australia Group (IAG.AX) and the Suncorp group (SUN.AX) have so far received more than 9,000 claims following severe storms and flooding in and around the largest city, Auckland.
As of Monday morning, Suncorp’s Vero and AA Insurance brands received about 3,000 complaints, while IAG’s AMI, State and New Zealand Insurance brands received more than 5,000 complaints.
Tower Ltd (TWR.NZ) Sunday said it had received more than 1,000 claims since Friday, and noted the losses were “substantial.”
“This is a very significant event which will lead to many claims,” according to the Insurance Council of New Zealand.
Insurance companies expect the number of claims to increase further in the coming days as the situation continues to unfold and customers identify damage.
Four people have now lost their lives in the floods and landslides that have hit Auckland over the past three days and millions of dollars in damage have occurred. A state of emergency remains in place in the city of 1.6 million people.
Auckland has seen record levels of rainfall since Friday and is expected to receive further heavy rain over the next few days, according to the city council.
The National Institute for 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.
On Monday, shares of New Zealand-listed Tower fell 8.5% to NZ$0.650, its biggest one-day drop since March 17, 2020.
Shares of IAG fell 5.9%, heading for its worst session in 15 months. Suncorp fell 2.8%, while its counterpart QBE Insurance (QBE.AX)which has not yet provided details of the complaints received, fell 2.9%.
The IAG noted that it was too early to determine the financial impact of the floods and that it may revise the 909 million Australian dollars ($645 million) in natural hazard costs it estimated for the fiscal year 2023, once the situation is clearer.
Suncorp said losses from this event will be capped at NZ$50 million ($32.4 million) as its reinsurance program provides additional protection for New Zealand losses.
Citi, in a research note, observed that IAG’s Auckland flood exposure, which could reach A$236 million, is “well above” Suncorp’s NZ$50 million cap.
($1 = 1.5427 New Zealand dollars)
($1 = 1.4085 Australian dollars)
Reporting by Harish Sridharan in Bengaluru; Editing by Aurora Ellis and Lincoln Feast.
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