NZ weather events “a moment of truth for insurers”
“The daily conversations we are having with our customers have been heartbreaking, and in the past few weeks we have been called upon to not only provide assistance with claims, temporary accommodation, and make-safe fixes, but also for a lot of moral support.”
For the CEO, whose camp settled its first Auckland Anniversary flooding claims in less than a week, it is times such as the recent period of extreme weather that defines insurers like Tower.
“As an insurer, these are our defining moments: paying claims is why we exist,” declared Turnbull. “And these events are an important reminder of the critical role insurance plays in both personal and economic resilience. While these events are a moment of truth for insurers, they are also a moment of truth for New Zealand as we collectively tackle the climate change elephant in the room.”
Rising to the climate change challenge
In his address, the insurance boss also highlighted the broader contribution that Tower wishes to make for New Zealand’s benefit.
He told shareholders: “As a country, we need to adapt and protect our communities. Tower has been advocating for greater transparency around risks for several years now. When we launched our flood risk tool in late 2021, we wrote to relevant Ministers as well as every council and MP in the country offering to share our model and insights into their communities’ flood risks. And we were pleased to have met with a number of councils to share our data.
“In the wake of the Auckland and Upper North Island event and Cyclone Gabrielle, this offer remains open, and in the coming weeks and months we will be reaching out again as we add coastal erosion and inundation, as well as landslide risks, to our model. Tower is committed to acting in the public interest, doing what we can to help inform good decision-making and building back better.”
Turnbull went on to cite the other things being pursued by Tower in response to the worsening effects of climate change, while adding that insurance isn’t the whole answer.
“We are also rising to the climate change challenge by developing new products and models to support communities through climate change, such as our Cyclone Response Cover in Fiji – a parametric insurance product that provides a rapid cash payout when a customer is impacted by cyclone, regardless of damage and without the need for an insurance assessor’s signoff,” noted the CEO.
“We are also helping people to build back better by providing $15,000 above the sum insured for a total loss to use for additional sustainable materials or products like solar panels or eco-friendly paints. But insurance is only one part of the equation. At a national level, we must do more to help protect communities as the effects of climate change worsen.”
Tower, which reported a 12.5% increase in gross written premium for the three months ended December 31, 2022, has estimated its total claims costs for the Auckland Anniversary floods to be somewhere between $95 million and $125 million. For Cyclone Gabrielle, Tower has no estimate yet as claims continue to be lodged.
