2023 NZPI CONFERENCE PRESENTATION


Are we procrastinating or are we planning?


PRESENTED BY: Sarah-Jayne McCurrach



Planning matters for insurance. The start of 2023 for the global reinsurance market was already looking bleak, a reduction in the available global capital by the end of 2022, made the 1 January 2023 insurance renewal, the most challenging in a generation. At the time of writing, Aotearoa New Zealand has experienced two significant storm events that gave the global market an additional ‘shock’. These events well exceeded generic claim estimates for January to April 2023. Inevitably, this will result in increased re-insurance costs, meaning we need to get smarter than ever.

Managing natural hazard risks is a delicate balance of being transparent, inclusive, and enabling communities to achieve acceptable and tolerable levels of risk, while allowing government decision-making and policy implementation. This balance has been challenging for us, for some time.

Sharing hazard risk information leads to early risk reduction interventions, ensures accurate and reliable hazard risk readiness, responses, and better risk-based decision-making. Yet, we struggle to use our hazard risk science, data, experience and knowledge, for evidence based, risk-based planning and decision-making. Ultimately, this means we continue to make decisions that generate more risk, not reduce it. These decisions are impacting us now and they will continue to impact future generations.

We need to question why we are delaying action. We need to use our evidence base, not neglect it. We need to trust how our communities will respond to risk-based information. We need to challenge the failings in our ability to plan smarter and build stronger. Organisations, councils, lawyers, and others are submitting that hazard zones and hazard risk data should be removed from district planning maps. Not only are we not using our risk data, but we are seeing a move towards it not being valued.

The current system isn't working, and we all need to be part of the change. This means having strong national, regional and district policies so Councils can say ‘no’ without fear of litigation. We need to stop putting more and more people in harm’s way, and not setting ourselves up for greater costs and social impacts in the future. We need to stop building in known high, or multi-hazard locations and stop our reliance on insurance. We are seeing increasing trends of properties being consented in high hazard areas, resulting in rapid insurance pay-outs. If insurers withdraw cover, planning has failed.

Despite Aotearoa New Zealand being well insured and achieving higher levels of insurance coverage than many other countries, we are taking this safety net for granted. Insurance is not finite; it never has been and should only be considered as a last resort in our resilience toolbox. Insurability should not dictate planning outcomes; planning needs to be more proactive, using knowledge and information to avoid high risk locations and reduce risks in others.

It’s time for Aotearoa New Zealand to place a higher priority on natural hazard risk management.

This presentation will highlight the perverse outcomes we’re seeing and spur us all to rise to the challenge.