Cost of claims for weather events more than doubles for many insurers

The cost of claims for storms and other weather events doubled and even tripled for many insurers in the last financial year.

The increasing exposure of people's homes and businesses to climate change-related extremes has prompted major underwriters to warn the next government it must do more on climate adaptation.

Vero, which has just released its annual climate disclosure statement, said weather-related natural hazard claims had jumped to $185 million in the year to 30 June.

That was well over double the previous year, when few major weather events occurred and claims totalled $70m.

IAG, which underwrites major brands including AMI and State, said claims for weather-related events in the 2026 financial year, also ending 30 June, totalled $322m, up from $132m.

It said there were 44 separate weather-related events during the reporting period, including damaging wind storms in Southland in October 2025, and extreme rainfall in Bay of Plenty in January that triggered the fatal Mauao landslide.

Tower Insurance was in its black-out period ahead of reporting annual results on 26 November.

However, its guidance update to the market said that large events claims costs totalled about $25 million in the year to 30 September, compared to only $7.2m the previous year.

"Last year we noted that FY25 large event costs were unusually low and well below Tower's historical 10-year average," a spokesperson said.

Vero, which is underwritten by Suncorp, said the long-term trend was heading in the other direction.

It projected that natural hazard claims costs for weather-related events would rise by 12-15 percent by 2040 and by 21-27 percent by 2050.

Insurers have been among those pushing for decisions on how New Zealand will plan for and adapt to a changing climate - and who will pay.

Suncorp executive officer Tom Hinds said addressing climate-related risks "will be essential to managing the cost of claims, reinsurance and maintaining affordable and accessible insurance cover in the coming decades".

Suncorp was adapting its own business but the issue needed a coordinated national approach, he said.

"To keep insurance affordable and accessible in New Zealand over the long-term requires coordinated investment in climate adaptation and resilient infrastructure."

In late 2025, the current Climate Change Minister Simon Watts released a 16-point adaptation framework setting out the government's approach to identifying and managing the risk from climate change-related hazards.

That included a proposed amendment to climate change laws, to require councils to identify high-risk areas in their jurisdictions and develop adaptation plans to cope.

However, the amendment did not pass before Parliament rose ahead of the election.

In a Cabinet paper approving the framework, Watts also proposed deferring decisions on who would share the costs of adaptation until after the election.

Earlier this year, IAG criticised successive governments' approaches to adaptation as "ad hoc and piecemeal".

In a report setting out the problem, it said there was no national plan for reducing risk, no plan for how the costs of doing so would be shared, and no framework for how communities would be relocated from high-risk areas.

Central government investment was inconsistent, and local councils were being asked to carry the load without the tools, funding or guidance they needed.

At the time, IAG chief executive Phil Gibson said the insurer recognised the country faced "practical and fiscal constraints".

"But delay, half-measures and political caution will cost us in the long run."

On Wednesday, he told RNZ that natural hazards had imposed at least $64 billion in direct costs on government, councils, insurers and communities over the last 15 years.

About 95 percent of that had been spent on response and recovery, with only a small fraction spent on reducing future risk.

"The human and financial cost of disasters continues to grow with serious consequences for affected communities and New Zealand's long-term economic resilience," he said.

"For many years we've made our position clear that the government needs to do more to enable councils and property owners to reduce the natural hazard risk that they face."

IAG was committed to working with the government, Gibson said.

Its report had set out a "practical 15-year roadmap" that set out how successive governments could address the dozens of gaps the company had identified in how the country approached natural hazard risk.