Storm warning from insurance broker
Backers of insurance companies have labelled New Zealand as a ‘‘high risk’’ location for storms and flooding, an industry source says.
As stormy weather works its way along the country this week, insurance brokerage NZbrokers is highlighting the need for businesses to recognise the weather-related risks they face.
NZbrokers chief executive Jo Mason said the number of storm and flood insurance claims has risen 56 per cent in New Zealand over the past three years, pushing up the cost of claims to insurers by 70 per cent.
As a result, the international Global Facility for Disaster Reduction and Recovery had ranked New Zealand at a ‘‘high hazard’’ level for most flooding and cyclone events.
‘‘While we were already rated as a high risk for seismic activity, now storm and flood losses in our market are on their radar as well.’’
However, despite the World Meteorological Organisation expecting the pace of adverse weather events to continue for the next four decades, Mason said most Kiwi businesses were ill prepared.
‘‘Of particular concern for New Zealand is the fact ocean temperatures are among the warmest on record and global sea levels are continuing to rise, so far by 26 centimetres,’’ she said.
‘‘Despite evidence which says emissions are levelling out, the concentrations of [carbon dioxide] will remain in the atmosphere and have increased at a record pace over the last year.’’
Industry figures for the past 18 months show insurers have paid out more than $265 million for 15 serious weather events.
Mason said the rapidly rising claims should be telling companies they need to review not only their current level of insurance cover but also their plans for business interruption.
Yet the majority of small to medium sized companies – including ‘‘man in a van’’ type businesses – had no contingency plans in place, she said.
The good news was that such preparation could potentially reduce premiums.
‘‘Sharing the extent of your preparedness with the insurer may demonstrate your business in a positive way, increasing the number of insurers that want to compete for your business and help reduce the premium.’’