The insurance industry’s natural catastrophe challenge in New Zealand is multi-peril and ever increasing. Cyclones, floods, storm surge and landslides can all turn into widespread insurance losses.
Cyclone Vaianu, the latest example, which made landfall on the North Island on Sunday brought destructive winds above 130km/h, heavy rain, large swells, flooding, power outages and several hundred evacuations in Whakatāne alone. The ongoing clean-up is under way with evacuees gradually returning to their homes.
That follows January’s Upper North Island storms, that included tragic loss of life and the displacement of about 500 people across the North Island. In February there were more severe weather events with emergency declarations in Waipā, Ōtorohanga, Manawatū-Whanganui and Banks Peninsula.
The Natural Hazards Commission (NHC) has received 824 claims from natural hazard events in January and February, most linked to landslides, with a further 133 claims so far for March landslides, storms and floods.
For brokers serving mid-market clients, the message is getting sharper with every event: this is no longer just a placement challenge, but a risk-differentiation challenge.
“Getting granular with submissions to the market and utilising the latest tools in catastrophe modelling and analytics is key,” said Marcus Pearson (pictured) CEO of Lockton Pacific.
That argument has a new urgency. Earth Sciences New Zealand (ESNZ) has said that more than 750,000 people and about NZ$235 billion of buildings are exposed to one-in-100-year rainfall flooding under the current climate. A major reason is increasing rainfall intensity across the country which means broad-brush postcode pricing and legacy flood maps are no longer enough to separate the well-defended site from the one sitting directly in harm’s way.
Science is trying to catch up. Last October, ESNZ launched a national flood hazard viewer to support risk assessment and adaptation decisions. For brokers, even as some stakeholders say flood cover remains widely available, that creates an opening.
“It’s about becoming a seller of risk - working closely with a client so you can go to markets and articulate the exact nature of their risks,” said Pearson.
For brokers and their clients those risks could include the position of a client’s key assets and whether they sit above expected flood levels, if they are protected by bunding and if business continuity plans are strongly in place.
With the public natural hazards scheme relying heavily on international reinsurance support - the Natural Hazards Commission says its reinsurance protection has been NZ$10.3 billion since June 1, 2025 - underwriters are likely to keep rewarding detail, discipline and differentiation.
Mid-market clients may not have the balance sheet sophistication of a major corporate, but many do have complex property footprints, supply-chain dependencies and operational vulnerabilities that can be better explained with analytics than with a standard market submission. A broker who understands elevation data, hazard overlays, construction resilience, loss-scenario modelling and the way catastrophe models feed rating decisions is no longer just presenting a risk. They are defending insurability.
In this nat cat impacted environment, granular risk detail, including analytics, is likely the clearest route to distinguishing a client from the risk next door and, increasingly, to keeping quality cover on the table.
