- AUTHORPast trends in weather-related insurance in New Zealand
- July 31 2018
Past trends in weather-related insurance in New Zealand
A new paper, released as part of the Deep South Challenge project, “Extreme weather, climate change & the EQC,” explores comprehensive EQC data to investigate weather-related claims from 2000-2017, and to observe how weather-related events have translated into financial liabilities for the Crown.
In New Zealand, properties where the owners make weather-related insurance claims through EQC are situated closer to the coast. However, claims are not necessarily associated with higher population growth areas. This can be seen in the high concentration of claims in the northern areas of both islands.
More EQC claims tend to come from locations with higher median incomes. The reasons for this increase in EQC pay-outs associated with higher income households are not yet entirely clear. They could be associated with better access to the system, higher exposure due to location preferences of various income groups, or higher damages caused by higher asset values (e.g. larger homes and larger land housing footprints).
The findings provided in this paper can also be considered in the context of discussions initiated by the Parliamentary Commissioner for the Environment, which proposes to institute an EQC-like scheme for dealing specifically with sea-level rise and flooding. It may also be useful for ongoing discussions about proposed revisions to the Earthquake Commission Act (1993) and the Insurance Law Reform Act (1985).
This paper is the first in a series. This work ultimately aims to identify the impact of the public insurance for weather events on adaptation and recovery, and to project the financial liability from climate change for the NZ Crown. This paper is only the beginning of insights about the increasing risk that current and future residential areas might face, given the high likelihood of increasing frequency and/or intensity of extreme weather events.
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