"We have a two-pronged problem"

“We have a two-pronged problem” | Insurance Business New Zealand

Catastrophe & Flood

“We have a two-pronged problem”

Stratford mayor calls for mitigation of weather issues amid complaints of insurance price hikes

Catastrophe & Flood

By
Kenneth Araullo

Stratford District Council mayor Neil Volzke called on Aotearoa to “get seriously serious” about mitigating weather events, lest New Zealand falls into a spiral of ever-increasing insurance prices.

“In principle we shouldn’t complain, because the whole purpose of insurance is to spread each individual’s risk profile across a whole lot of people, in effect meaning, that when one person’s individual claim occurs, we all collectively pay for it,” Volzke said. “The trouble is these natural disaster claims are becoming more and more frequent and of much larger scale. Each event has a horrendous cost attached to it both in financial terms and in human grief. So, what does the future hold? A recent report makes for some grim reading.”

Citing a report from Niwa and the University of Auckland, Volzke said that more than 440,000 residential properties were at risk of flooding, all with a replacement value of $218 billion. An additional 12% of the country’s housing also sits in flood hazard areas, equal to more than 282,000 houses valued at $213 billion and more than 158,000 apartment buildings valued at $5 billion.

“Essentially, we have a two-pronged problem. One is dealing with buildings that are already in existence and the other is managing where buildings are constructed in the future,” Volzke said.

What is alarming, he added, is that there are still houses that are being built in these flood-risk areas. It has been previously reported that more than 15% of the state housing portfolio sits on flood-prone land, and that Kāinga Ora – the Crown agency for rental housing – planned to continue this trend on land that will still be flood-prone in the future.

The mayor did see a silver lining in that the election campaign has raised awareness towards these issues, not to mention the damages done by Cyclone Gabrielle earlier this year. However, he also warned that the issue also needs to be a bipartisan focus that should unite all Kiwis.

“Unless we get seriously serious about mitigating these uncontrollable weather events soon, we are going to be paying like never before. Furthermore, the issue needs to be de-politicised, and a cross-party strategy developed that is based on scientific and geographical factors, not vote-catching headlines,” he said.

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