The Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) has expressed support for the government’s plan to introduce climate adaptation legislation in 2025, which aims to address the growing risks associated with climate change.
ICNZ chief executive Kris Faafoi stated that clear policy direction is necessary to ensure communities, businesses, and the insurance sector can prepare for increasing natural hazard risks.
“New Zealanders need certainty about the way natural hazard risks from climate change are going to be managed, and government leadership in this critical area is welcome,” he said.
The government’s announcement follows recommendations from the Finance and Expenditure Select Committee’s inquiry into climate adaptation.
Faafoi said that the insurance industry is prepared to work with policymakers to develop an implementation plan that aligns with the realities of risk management.
“The government has acknowledged that a significant proportion of New Zealanders live in areas susceptible to increasing natural hazard risk and that the prospect of more frequent and severe weather events may impact the stability of our housing, finance, and insurance markets,” he said.
The industry reaffirmed its commitment to working with the government to advance the country’s climate adaptation as it faces growing climate risks.
A recent review by QBE Insurance’s catastrophe modelling research team and Bell Adapt highlighted the increasing role of climate change in shaping New Zealand’s insurance landscape. The study examined how intensifying weather patterns are shifting risk exposure and affecting insurers’ ability to manage long-term liabilities.
The report emphasised that managing climate-related risks will require coordinated efforts between insurers, policymakers, and local communities. Investments in research, infrastructure, and resilience measures will play a key role in maintaining the sustainability of New Zealand’s insurance market as climate risks evolve.
The ICNZ advocates for a long-term, cross-party approach to climate adaptation to provide the stability needed for insurers and reinsurers to make investment decisions.
“Adapting to climate change requires a long-term political commitment as reinsurers and insurers need long-term policy and investment certainty for some of the likely actions and investments required to safeguard Kiwis and minimise the insurance protection gap,” Faafoi said.
He also pointed to economic data suggesting that proactive adaptation measures can reduce the financial impact of future climate-related disasters.
“Research shows every dollar invested in adaptation brings substantial economic benefits. By addressing these risks now, New Zealand can avoid the higher costs associated with future climate-related disasters,” Faafoi said.
