The country's largest insurer says building in flood-prone areas has to stop.
Flooded farmland in East Cape (file photo) Photo: RNZ / Angus Dreaver
IAG has released a three-part plan to try speed up efforts to reduce flood risk from rivers.
It said climate change was having an enormous impact on the insurance sector, and there needed to be simple, practical, concrete actions quickly:
- Formal private and public sector project to identify the most risky places using their combined information
- Stop building in flood prone locations and create a document that binds councils to avoid new development or intensification in places with more than one-in-50 year flood risk.
- Develop a national programme for investment in flood protection infrastructure, involving NZ Infrastructure Commission and Treasury plus local government and stakeholders to work
There have been 10 major floods in the past two years with total insured losses of about $400 million, while the wider economic and social costs extend into the billions.
About 1 percent of homes - some 20,000 properties - are at greatest risk of river flooding.
- Read RNZ's explainer on flood insurance here
IAG chief executive Amanda Whiting said the most sensible thing to do was to stop people from building in harm's way.
"Development and investment decisions are leading to more people living in flood-prone locations.
"Reducing the impact of flooding through better planning and infrastructure investment will help us to avoid a situation in the future where low-lying communities are more frequently disrupted by floods.
"If this continues, those homes and businesses that are the most exposed to flooding will find it difficult to obtain or afford insurance."
IAG chief executive Amanda Whiting Photo: Supplied / IAG
Local councils were often caught in the middle and needed concrete guidance about where it was safe to develop, quickly, she said.
Some flood-prone areas were lower-cost developments, so they were attractive to first home buyers. These owners were the most stretched financially and less able to afford repairs and mitigation.
Places subject to greater than one-in-50 year flood risk include parts of Westport, Gisborne and West Auckland, Whiting said.
The impact could be incredibly localised, and IAG's plan called for information-sharing to identify specific places which would have the biggest issues.
In Westport, there were examples of houses on which repairs had only just been completed before they were immediately damaged again.
"Our role is very clear, we want to be here to protect every New Zealander and we are not withdrawing from any location at the moment.
"We are ensuring insurance is available and affordable for those communities."
She was not sure how long communities could withstand being repeatedly exposed to these events, though. If nothing was done, insurance prices would increase over the next several years which would "be a challenge in terms of affordability".
Climate Sigma climate economist and modeller Belinda Storey has told RNZ she wants insurers to provide data to a regulator about properties or areas where cover had been withdrawn, so policymakers were not flying blind.
Whiting said by opening its books it meant it was willing to share where the most high risk areas were.
The government's programme to adapt to the effects of climate change, the National Adaptation Plan (NAP), was a good start but more simple, targeted and urgent actions were needed, she said.
The NAP includes plans for protecting against climate change damage, and managed retreat (getting out of harm's way).
Other detailed work will be done in Resource Management Act reform, which will not come into effect until 2024 at the earliest.
The plan recognises the current rules and laws are blocking action and intends to embed climate resilience in all government policies.
IAG has the AMI, State, NZI, NAC, Lumley and Lantern brands.
