As climate-related disasters intensify, New Zealand’s insurance industry is being urged to shift from response to readiness mode. Presentations by QBE and research commissioned by IAG at events co-hosted by the Insurance Council of New Zealand (ICNZ) and the BusinessNZ Energy Council highlighted the need for insurers to incorporate climate science into their underwriting and investment decisions.
Climate Science Review Highlights Exposure
A scientific review presented by Dr. Joanna Aldridge of QBE and Dr. Rob Bell of Bell Adapt emphasized the importance of accessible climate data. “By sharing insights, we’re supporting a shift from response to readiness,” Aldridge said. “From reacting to extreme events to preparing for them and reducing their impact. That’s the role insurers can and should play.”
The review was prompted by two major weather events in early 2023 – the Auckland Anniversary floods and ex-Tropical Cyclone Gabrielle – which caused insured losses exceeding $2 billion each. These events demonstrated the limitations of traditional catastrophe models in the face of changing climate conditions.
Regulatory Shifts Drive Data Needs
New Zealand’s mandatory climate-related financial disclosures, implemented in 2024, require large insurers and financial institutions to disclose climate risks. Dr. Bell emphasized the need for localized models due to New Zealand’s unique geography and climate variability.
Separate research commissioned by IAG New Zealand revealed that the country has spent an estimated $64 billion on natural disasters since 2010, with the majority allocated to post-event recovery. IAG New Zealand CEO Amanda Whiting noted that these costs represent a significant drag on the economy.
Rising Community Concern and Resilience Action
A survey by the Natural Hazards Commission found that 71% of New Zealanders have taken steps to fortify their homes against hazards, a 15-point increase from the previous year. Nearly 90% of prospective homebuyers now consider hazard exposure when evaluating properties. Insurance brands AMI, State, and NZI reported increased public anxiety about severe weather, with over half of survey participants expressing concern about storm events.
