Insurers report weather claims surge as adaptation plans stall

Weather-related insurance claims in New Zealand more than doubled for major underwriters during the 2026 financial year.

Vero reported that weather-related natural hazard claims reached 185 million dollars in the year ending June 30. This figure was more than double the 70 million dollars recorded in the previous year, a period with few major weather events. IAG, which underwrites brands including AMI and State, reported weather-related claims totaling 322 million dollars for the same period. This marked a substantial increase from 132 million dollars in the prior year. IAG attributed the rise to 44 separate weather-related events, including damaging wind storms in Southland in October 2025 and extreme rainfall in the Bay of Plenty in January that triggered the fatal Mauao landslide.

Tower Insurance, currently in its black-out period ahead of its annual results release on November 26, provided guidance indicating large event claims costs totaled approximately 25 million dollars in the year to September 30. This compared to 7.2 million dollars in the previous year. A spokesperson noted that costs in the 2025 financial year were unusually low and well below Tower's historical 10-year average. Vero, underwritten by Suncorp, projected that natural hazard claims costs for weather-related events will rise by 12 to 15 percent by 2040. The company expects an increase of 21 to 27 percent by 2050.

Suncorp executive officer Tom Hinds stated that addressing climate-related risks is essential to managing the cost of claims, reinsurance, and maintaining affordable insurance cover. He argued that keeping insurance affordable and accessible in New Zealand over the long term requires coordinated investment in climate adaptation and resilient infrastructure. IAG chief executive Phil Gibson told RNZ on Wednesday that natural hazards have imposed at least 64 billion dollars in direct costs on government, councils, insurers, and communities over the last 15 years. Approximately 95 percent of that total has been spent on response and recovery, with only a small fraction allocated to reducing future risk.

Gibson said the human and financial cost of disasters continues to grow, with serious consequences for affected communities and the country's long-term economic resilience. He noted that IAG has maintained that the government needs to do more to enable councils and property owners to reduce natural hazard risk. The company is committed to working with the government and has outlined a practical 15-year roadmap to address gaps in how New Zealand approaches natural hazard risk.

In late 2025, Climate Change Minister Simon Watts released a 16-point adaptation framework. The plan proposed amending climate change laws to require councils to identify high-risk areas and develop adaptation plans. The amendment did not pass before Parliament rose ahead of the election. In a Cabinet paper approving the framework, Watts proposed deferring decisions on cost-sharing for adaptation until after the election. IAG previously criticized successive governments' approaches to adaptation as ad hoc and piecemeal. The insurer reported that there was no national plan for reducing risk, no plan for cost-sharing, and no framework for relocating communities from high-risk areas.

Gibson acknowledged that the country faces practical and fiscal constraints. He warned that delay, half-measures, and political caution will cost the country in the long run. IAG's report identified that central government investment was inconsistent, while local councils were asked to carry the load without the necessary tools, funding, or guidance. The insurer continues to push for decisions on how New Zealand will plan for and adapt to a changing climate, including clarifying who will pay for adaptation measures.