New Zealand is no stranger to natural hazards, having suffered more than its fair share of storms, earthquakes, floods and landslides over the past few decades. But one risk that has seemed fairly distant to most is volcanic eruptions, with many forgetting that New Zealand is a country built almost entirely out of land pushed out of the sea by erupting volcanoes.
New Zealand sits on the Pacific ‘ring of fire,’ a geographical area known for its significant earthquake and volcanic activity. Auckland alone is sitting on over 50 volcanoes, and 10 major still-active ones are scattered all over the country. Mild eruptions occur regularly.
The last major eruption was that of Mount Ruapehu in 1995 – 1996, which generated over 200 claims to the EQC totalling several million dollars. And although the risk of another major eruption within our lifetime is fairly remote, volcanologists say that small to medium eruptions are almost a certainty, and a framework of readiness involving scientists, insurers and the government is always in place.
Insurance Business spoke to GNS Science volcanologist Brad Scott, and The Earthquake Commission (EQC)’s head of resilience strategy and research, Dr Jo Horrocks about New Zealand’s volcanic risks, preparedness strategies, and its uniquely strong insurance framework.
The types of volcanoes
New Zealand is home to three main types of volcanoes: the Auckland volcanic field, cone volcanos, and the caldera, also known as the “supervolcano.”
According to Brad Scott, each of these throw up their own unique type of risk as they each have different ‘return periods’ and eruption impacts, and some are much more difficult to plan for than others.
“The Auckland volcanic field consists of 53 volcanoes in random locations with random timing,” Scott explained. “The big problem there is that we know a lot about the hazards, but we don’t know where the newest volcano will be. So we can’t do a lot of specific planning.
“The second type is the cone volcano, and that’s what most people imagine a volcano to be – Ruapehu, Ngauruhoe, Taranaki, White Island, etc.,” he continued. “These are much easier to deal with because we know where the vents are, they’ve been active for thousands of years, so we can put a dot on the map and do some specific planning around it.
“The third type is the caldera, or the “supervolcano.” These are large systems with enormous amounts of molten material. Rotorua basin is a classic example – 20-odd kilometres across, and that’s a single volcanic crater which erupted 200kms of material 230,000 years ago.”
Scott says that the calderas generate two different types of eruptions, and therefore two very different styles of problem.
First are the eruptions that form the caldera in the first place – extremely rare, generally happening once every 50,000 – 100,000 years. But once formed, they also see some resurgent volcanism approximately every 2,000 years. Those can be fairly large eruptions in their own right with a significant impact, and volcanic unrest episodes tend to occur every 50-100 years.
Taupo has had 17 ‘unrest’ episodes since 1930, and in the worst case scenario, the area saw self-evacuation due to earthquake activity and ground deformation.
How will we know when an eruption is coming?
According to Scott, the great thing about volcanoes is that they will all “put their hands up” before an eruption. They are not silent, instantaneous events, and this means there is always a good chunk of warning time before anything destructive happens.
GNS currently monitors three key factors: earthquake activity, ground deformation and water and gas chemistry. Moving molten material will cause the ground underneath the volcano to swell and shake, gases and geothermal systems will make a whole lot of noise, and hot rocks will heat water and turn it to steam.
“Volcanoes inherently become quite noisy, and so we get a good idea of which one it is and what it’s up to,” Scott said.
“But there is a lot of variability. We have recorded volcanic unrest that took over 20 years to erupt, and some volcanoes come on in three weeks. Some data for Auckland suggests it could be as short as 10 days. The challenge for us is to recognise that the volcano has put its hand up.”
What would the damage be?
In terms of damage, there are two key categories – destructive ‘near-source’ damage, and ashfall past a 4-8km radius.
The near-source impact involves a cannonball-type explosion, lava flows, debris and avalanches. Scott says that each of these hazards is completely destructive, so, as a general rule, everything in the 4-8km bracket will be either heavily impacted or destroyed.
Further away, volcanic ashfall is usually more of a nuisance but may impact infrastructure, homes, power lines and water supplies. This then becomes a clean-up issue.
“The building code in New Zealand is designed for around 200mm of snow, and volcanic ash has around the same density,” Scott explained. “As a result, most buildings would be able to withstand that.”
How prepared are we?
Dr Jo Horrocks of the EQC says that there has been an obvious focus on seismic risks over the past few years, but now is a good time to consider how New Zealand would deal with other types of natural hazards.
The EQC currently covers for residential home and land damage for all natural hazards, including volcanic activity. A preparedness strategy is in place, and a claims strategy is being developed from the Kaikoura earthquake response, where private insurers were at the forefront of dealing with claims.
“It’s really imperative that we understand the nature of volcanic risks, and we’re currently working with private insurers to develop an industry-wide strategy,” Horrocks said.
“We want to establish a way to manage claims, and to deliver the best experience for customers. Looking back at Canterbury, that response perhaps wasn’t optimal on either of those fronts, so we’re asking how we can ensure that that doesn’t happen again. That applies whether it’s an earthquake, volcano, landslide, etc. What is the best way we can manage the public-private model of insurance that we have in New Zealand?”
Horrocks says that research and education is also a key part of that strategy, as is looking overseas at other countries with high volcanic activity, such as Japan or Chile. However, she says New Zealand has one unique thing going for it, and that is its incredibly high level of insurance cover.
“New Zealand really has its public insurance working in its favour,” she explained. “Our insurance penetration is much higher than that of other countries – around 90% right now, and that level of insurance cover is unprecedented around the world.”
The current situation
At the moment, New Zealand’s Volcanic Alert Level system uses five levels to assess the status of each volcano. These levels are:
Currently, White Island and Ruapehu are the only volcanoes at alert level one, but Brad Scott says they are known to bounce between levels one and two.
Ruapehu’s 1995-6 eruption was classed as level four, and there have been three eruptions of that size in recorded history.
“The elephant in the room is Taranaki,” Scott said.
“It’s a large cone volcano with significant petroleum and agricultural infrastructure around it, so that could be a problem. It has a return period of about 300-500 years, so that’s a moderate possibility in our lifetime.
“Ngauruhoe has done nothing for 30 years, though before that it was never more than nine years without a significant eruption. So there’s a lot of variability, and the different types of volcano have different return periods and cycles.
“However, New Zealand can expect small to moderate eruptions in any 100 year planning cycle. That’s a given.”
