The Insurance Council of New Zealand (ICNZ) says coverage affordability and availability are at risk if governments and communities do not reduce climate-related hazard exposure before disasters occur. The council made the position clear on May 8 in response to the Climate Change Commission’s 2026 National Climate Change Risk Assessment. “The commission’s message is clear. New Zealand must act to get ahead of growing climate risk,” ICNZ chief executive Kris Faafoi said. The report ranks 10 risk categories by severity and urgency. It is a statutory requirement under the Climate Change Response Act 2002 and will feed into a new national adaptation plan the government must produce by 2028.
Flood exposure to residential and commercial buildings stands out in the findings. The commission’s data puts roughly 556,000 properties in areas at risk from inland flooding, with a collective replacement value of $235 billion. The report also flags thermal performance as a growing concern, noting that the bulk of New Zealand’s building stock was not constructed to handle sustained heat – a gap that could carry public health consequences as temperatures climb. Climate Change Commission chief executive Jo Hendy framed the building risk in terms that go beyond structural damage. “If we build homes that can cope with floods and extreme weather, we’re not just protecting the building, we’re protecting people’s health, keeping essential services running, and helping keep those homes insurable,” Hendy said.
Transport networks face parallel pressures. Commission data shows roughly one in four roads and more than one in three rail lines sit within zones exposed to surface, river, or coastal flooding. The report notes that when those networks fail, the effects extend well beyond transport – disrupting supply chains, delaying emergency response, and compounding damage to power and telecommunications infrastructure. Water infrastructure is identified as the most time-critical area. The commission’s modelling indicates that without intervention, water-related risks could be the first in its dataset to reach an extreme severity rating within 25 years.
The Commission's analysis points to a longstanding pattern in how public money flows toward natural hazards. Data cited in the report shows that since 2010, 97% of government expenditure on natural hazards went to response and recovery, with 3% directed at risk reduction. Hendy addressed the financial logic of that split. “We currently have an imbalance where 97% of government spend is on responding to natural hazards and only 3% on building resilience. By getting it right at the national level, and turning our focus to building climate resilience, we can break the cycle of react and recover,” she said. The fiscal stakes are illustrated by the 2023 North Island weather events, which drew $6.65 billion in government expenditure. The commission’s report warns that as hazard frequency and severity increase, mounting recovery costs – combined with reduced revenue from climate-affected industries – could put pressure on governments’ capacity to fund other public services.
The ICNZ connected the commission’s findings to conditions in the insurance market. Faafoi pointed to floods, coastal inundation, and erosion as the hazards most likely to affect coverage terms if exposure is not reduced. “Building resilience to risks such as floods, coastal inundation, and erosion will help protect families, businesses, and communities and maintain insurance accessibility,” he said. The council cited polling data indicating that 87% of New Zealanders back pre-disaster action to protect communities – a figure Faafoi said reflects public appetite for a different approach to hazard management. “Reducing risk is key to ensuring insurance remains accessible to Kiwi communities,” he said.
The commission’s report puts quantitative weight on what many in the sector have observed anecdotally. Hendy noted that damaging storm events, which occurred roughly monthly 15 years ago, now happen about weekly. Over the five years preceding publication, weather and flooding events accounted for 80% of all declared states of emergency nationwide. The NCCRA also covers risks to emergency management capacity, social cohesion, ecosystems, forestry, and the ability of central and local government to make and fund long-term decisions under sustained hazard pressure. A companion report examines specific risks to iwi and Māori, covering cultural sites, land rights, health, and access to natural resources.
The Minister of Climate Change has two years from the NCCRA's publication to respond with a revised national adaptation plan addressing the report’s priority risk areas. The commission’s next adaptation progress report, due in August 2026, will assess how the existing plan is tracking and set out recommendations for the next one. Hendy pointed to the cost of inaction as the underlying rationale for moving on the findings. “If we don't act, costs could run into the billions and affect every part of people’s lives,” she said.
