Insurance expert urges NZ insurers to take ‘floods as seriously as earthquakes’

Cyclone Gabrielle shows that focus needs to be widened

Insurance expert urges NZ insurers to take ‘floods as seriously as earthquakes’

Catastrophe & Flood

By Kenneth Araullo

The destruction brought about by Cyclone Gabrielle has negatively impacted the lives of many Kiwis, so much so that an insurance expert has urged insurance groups to take floods and put them on a severity level equal to that of earthquakes.

Finity consultant and actuary Emma Vitz called out the industry in a video interview, stating that while New Zealand has become experts at earthquake risk, there hasn’t been a similar focus on flooding and other climate change-related catastrophes. Her calls come shortly after ICNZ chief Tim Grafton urged Aotearea to ‘build back better’ following the destruction left by Gabrielle and the Auckland floodings.

“We need to be judicious about where we build”

“What we’ve learned is that it’s time to take flood as seriously as some of the other perils we have a lot of experience with in New Zealand,” Vitz said in an interview. “We have spent years becoming experts at managing earthquake risk, and we’ve done that really well.”

While she praised the government and insurance groups for their efforts to make earthquake insurance readily available and affordable, she noted that the bodies have not spent as much time in “doing these for other perils.”

Despite the billions lost and countless lives affected, Vitz sees a silver lining in this harrowing situation. “I think that puts us in a really good position. We have a lot of experience in making our communities stronger, and it’s time to start applying those to perils such as floods and storms,” she said.

Vitz also urged NZ insurers to properly “address the risk issue,” especially for people with particularly flood-prone properties. According to her, this is the best way to maintain insurance affordability.

That said, other sectors also need to be involved. Echoing the statement made by Grafton, Vitz urged Kiwis to be more “judicious where we build,” and invest more heavily in resilience measures.

“In that way, we can move towards a situation where people are safe – which is obviously the most important thing – but they’re also able to purchase insurance and keep that cover,” Vitz said.

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