The Insurance Council of New Zealand | Te Kāhui Inihui o Aotearoa (ICNZ) is urging the government to set firmer rules for managing natural hazard risks, warning that the current approach may leave councils uncertain about how to stop development in hazard-prone locations.
The call comes during consultation on the government’s proposed National Policy Statement (NPS) for Natural Hazards, designed to guide how such risks are incorporated into land-use planning decisions.
ICNZ chief executive Kris Faafoi said that New Zealand’s exposure to events such as floods, landslips, coastal inundation and sea-level rise is increasing.
“New Zealand faces significant natural hazard risks, including flooding, landslips, coastal inundation and sea level rise and these risks are intensifying with the science indicating the prospect of more frequent and severe climate related events,” he said.
He said a more decisive national policy would help keep communities safer and maintain the availability of insurance.
“We support the government’s focus on strengthening the planning system to deal with natural hazards. A strong, clear national policy will empower councils to control development in areas exposed to high hazard risk,” Faafoi said.
According to ICNZ, several councils are already applying similar principles to those in the draft NPS.
However, the group said the proposal’s flexibility could result in inconsistent application across the country, making it harder to maintain national standards.
The industry body also warned that uncertainty in the policy could increase the likelihood of planning decisions being challenged in court.
Faafoi said that more robust rules would help reduce exposure before disasters occur, rather than relying on post-event recovery.
The ICNZ position coincides with findings from the latest Willis Natural Catastrophe Review, which projects that global insured losses from natural disasters will again surpass US$100 billion in 2025.
If this happens, it will be the seventh consecutive year at or above that level.
Significant events in the first part of the year include January’s Los Angeles wildfires, estimated to cost insurers more than US$40 billion – the largest wildfire loss on record.
Other recent disasters have included large wildfires in Japan and South Korea, a record tornado season in the US, Australia’s first cyclone to make landfall near Brisbane in 50 years, and Ireland’s highest recorded wind speed.
The report also anticipates an active North Atlantic hurricane season, which could push total losses for the year even higher.
