The Insurance Council of New Zealand has praised the government’s commitment to proposing a new climate adaptation framework this year.  

“The insurance industry is keen to continue to contribute to the policy formation to keep protecting communities and customers,” CEO Kris Faafoi said.

“As the government has noted, an implementation plan will be required that all sectors can buy into and is achievable.  

“New Zealand is a risky country, and we are committed to finding solutions that reduce our exposure to natural hazard risks by avoiding building in dumb places and by investing in infrastructure that protects communities, as well as better preparing for recovery from future natural disasters.”

The government announced the plan in response to recommendations from a Finance and Expenditure Committee inquiry into climate adaptation last October.  

It acknowledges a “new reality” has left many people “susceptible to increasing natural hazard risk” and its impact on the stability of housing, finance and insurance markets.  

The government says climate change threatens to exacerbate “a number of existing flaws in the system”, including property development in high-risk areas, infrastructure underinvestment and a lack of clarity on roles and responsibilities around adaptation.  

Mr Faafoi has also welcomed the government’s plan to deliver a cross-party solution, to ensure support for adaptation is enduring.  

“Adapting to climate change requires a long-term political commitment as reinsurers and insurers need long-term policy and investment certainty for some of the likely actions and investments required to safeguard Kiwis and minimise the insurance protection gap,” he said.  

“By addressing these risks now, New Zealand can avoid the higher costs associated with future climate-related disasters.”