New Zealanders want much more action to be taken to protect themselves and their properties from extreme weather events, a message for all political parties as the election approaches.
On the back of the Auckland Anniversary Weekend floods and Tropical Cyclone Gabrielle, the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) decided to ask the public where to from here. We conducted a survey of a representative sample of 1,021 adult New Zealanders to test views on what should be done as the country faces more frequent and extreme weather.
We asked whether government invests enough to protect people and property from extreme weather. More than half (53%) said ‘no’, a marked increase on the 39% who said that a year earlier.
We also found that the vast majority (86%) want more controls to be applied on where properties are built so they are not at risk of flooding. This too was a significant increase on the 79% who said that last year.
At the same time, most people (58%) agree that private insurers should play a role of fairly pricing risks into the premiums they charge. That was a similar proportion (59%) to those who said the Government should not waste money subsidising insurance so people can stay in high-risk areas.
As we head into an election, people are sending a very clear message that they want to see investment in resilience measures and don’t want the historical pattern of building in dumb places to continue. Steps are being taken in the right direction, but these cannot be left as a one-off response to the extraordinary events of this year.
It is encouraging to see homeowners affected by this year’s extreme events being offered to be bought out in areas where it is considered too high a risk to life and safety to remain. These areas are unlikely to get residential insurance cover.
It is a positive move to see funding being allocated to build flood resilience in other areas either on an area-wide or property specific basis. The real test of the value of this investment though is whether enough is being allocated to reduce risks over the longer term. Planning needs to take into account more frequent and severe weather due to climate change.
More generally, there needs to be a permanent allocation of investment in flood resilience before catastrophe strikes. Policies need to reduce risks to people and their properties to tolerable levels where it makes economic sense to do so.
Where these investments have occurred, it has been shown that every dollar spent on pre-event risk reduction saves at least $5 in post-event losses. That does not even count the social costs.
Our survey also had pointers for insurers around the role they can play alongside pricing risks fairly.
Across a range of actions insurers could take, a large majority agreed that insurance companies should educate consumers on reducing their risk (70%) and almost two-thirds (64%) agreed that insurers should provide incentives to consumers to take action to reduce risk. There’s potential for more work to be done in that space beyond signalling elevated risk through terms and conditions.
Just as people want the protection of insurance, insurance wants to be there to offer that protection. Insurers do not want to see insurance become less affordable and their market shrink. Sound policies to make New Zealand more resilient to climate change must be given the priority they deserve, and Kiwis expect.