2007 was one of the most costly years on record for weather-related disasters. Claims from seven weather disasters totalled $96.25 million in losses (source Insurance Council of New Zealand (
ICNZ)).
July 2007 was our most costly month. A swarm of tornadoes hit the Taranaki region. One of the most prolonged freezes in the south caused chaos on the roads and burst water pipes throughout the region, and floods ravaged Northland for the second time in a year. These events saw thousands of our customers suffer personal trauma and property loss. As soon as it was safe, our people were in the first wave of relief services to respond. Part of running a sustainable business is being really effective at meeting our customers’ needs at the time of disasters. We’ve had lots of practice. This is what we’re here for. Our people across the country need to be outstanding, working together to honour our commitment to providing rapid claims help in times of crisis and to be there for customers when they need us most. Dedicated claims and assessing employees from across the country form part of the relief effort. We plan for the influx of customer calls to our call centres, and are ready to mobilise our people in the places they’re needed quickly. Our loss adjusters, who assess loss to property, are our ‘faces in the field’, helping customers through the clean-up and rebuilding stages. In New Zealand weather-related disasters account for 18 of our top 20 most costly insurance events. We’ve seen a recent increase in the regularity of natural disasters affecting New Zealand, and each year the weather is costing insurers more. Between 2002 and 2007, insurance companies paid out $408 million for natural weather disasters, more than two times the $154 million bill between 1996 and 2001.
These disasters, coupled with steep inflation in the costs of global fuel and commodities, affect all of us – including the insurance industry’s profitability. Our prices at present no longer reflect the risks we’re insuring, and are unsustainable. That’s why premiums need to be responsibly raised.
Our ability as a nation to future-proof our communities will be critical for insurance companies considering how to insure risks, at affordable premiums, in a future climate. Of particular concern is the number of homes and businesses which are situated in flood plains.
Whether it’s the capacity of building designs and materials to withstand stronger weather events or people’s awareness about how to lower the risks of being affected by storms, we’re committed to helping find ways forward that work for both our customers and the company.
This year, together with the ICNZ and other interest groups, we’ve been working with the
Ministry for the Environment to help them develop tools for local authorities to control development in flood-plain areas.
Linked to climate change is our commitment as a company to reducing our environmental footprint. We’re only ever going to have one planet and we believe we should all be doing our best to preserve it.