What’s climate change got to do with earthquake insurance? Extreme weather and the EQC
Extreme storms are likely to become stronger, more frequent and more damaging as our climate changes. These storms can cause real harm to communities and entire regions. Increasingly damaging extreme weather events also pose long-term sustainability challenges for public risk transfer mechanisms (such as the Earthquake Commission or EQC).
This seminar with Ilan Noy (Victoria University of Wellington) provides an overview of his research into climate change and the EQC.
Over the last 20 years, the EQC has paid out over $240 million, on more than 17,000 claims, to households affected by non-earthquake disasters (for landslips, storms or floods).
The team’s findings suggest that, regardless of which future climate scenario we end up with, annual EQC liabilities for extreme weather are likely to increase. That increase could be up to 18%, though the team’s research also suggests even this is likely to be an underestimation.
Furthermore, using three recent extreme events as case studies, Ilan explains the research findings around whether EQC insurance pay-outs have supported households and communities to recover after extreme weather events. In general, this research suggests that EQC insurance is serving its purpose, and is protecting households from the adverse financial impact of extreme weather events.