Insurance Council calls on councils to prioritise climate resilience

With record claims being posted for extreme weather events, Insurance Council of New Zealand Chief Executive urges local councils to invest in community-centred climate resilience.

New claims data released midSeptember by the Insurance Council of New ZealandTe Kāhui Inihua o Aotearoa (ICNZ) show that weeks of extreme weather over July resulted in 6,266 general insurance claims with a provisional value of $43.7 million.

“Extreme weather continues to hit Aotearoa New Zealand’s communities hard”, said ICNZ Chief Executive, Tim Grafton. “We must act now to increase resilience and so lessen the impact of climate change on our way of life.

“This is not just about those things typically covered by general insurance such as our homes, vehicles and businesses, he said. “We also need to protect our infrastructure, environment and general way of life which is all too easily disrupted by climate-driven extreme weather events.”

Three extreme weather events were declared by the general insurance sector in July, resulting in over $12m each in claims. Preliminary figures of 807 claims valued at $8.1 million for 20 May’s Levin tornado have been finalised at 930 claims worth $11m.

While preliminary claims data for August’s extreme weather-related claims are expected around the end of the month, July’s events take the running total for such claims in 2022 to around $245m, compared to $324 million for all of 2021, which in itself set a new record.

“The rising cost of climate change is plain for all to see, both within Aotearoa and overseas. This comes at a time when we are facing rising general inflation, outsized building cost inflation and ongoing supply chain issues. These are tough times for customers and insurers alike,” said Tim.

The ICNZ’s Tim Grafton has called upon local councils to invest in community-centred climate resilience. “Incoming mayors, councillors and community board members must prioritise investing in community-centred climate resilience,” he said.

No matter how well current coastal, flood or landslip measures stand up to today’s climate-driven extreme weather events, the ICNZ stated that it is expected that such events will get more frequent and their impacts and costs more severe.

“Investing in measures to reduce climate risks will have widespread benefits for communities and will help support the affordability of insurance the length and breadth of the motu,” said Tim. “Incoming councils must understand the risks facing their communities and to put in place proportionate and timely measures to manage them.”

According to the ICNZ, we are also now seeing the consequences of repeat extreme rain events, sometimes compounded by our background seismic activity, on the incidence of slips and related damage and disruption. Some communities are being cut off for days at a time several times a year, and questions are being raised over the long-term viability of some roads.

“Our communities face multiple climate related risks. All incoming councils have must act to address these if they are to maintain the viability of their communities over the medium to long terms,” said Tim.