New Zealand can expect to face, on average, annual costs of NZ$1.6 billion (US$1.17 billion) or just under 1% of its GDP, from natural disasters, based on data going back to 1900, according to the chief executive of the Insurance Council of New Zealand, Mr Tim Grafton.
Without risk reduction, that cost will increase, he added.
The risks would keep getting worse for some areas. More risk equals higher cost. Eventually, insurance wouldn't be provided, according to a report in stuff.co.nz.
"[Insurers] cover risks, not certainties. So if it's almost certain you are going to be flooded, then that's not the business we are in," said Mr Bryce Davies, the general manager of corporate relations at IAG, whose insurance brands include State and AMI.
Climate change is already having an impact on the insurance industry, but it is hard to say how much, said Mr Davies.
"Everyone is trying to get a handle on it, so there's no real definitive answer," he said.
"We can see in the money we pay out... the costs are going up. It's becoming more expensive. And it will only become more so.
"For us, climate change is just exacerbating the risks we already had."
Mr Davies said that the market in New Zealand is heading more towards risk-based pricing.
While there are some areas where risk-based pricing already exists, other factors may also play a part – not just climate change. Earthquakes are the main cause.
The Insurance Council of New Zealand has warned that insurance "must remain available and affordable for everyone otherwise individuals, business, local and central government will end up bearing the brunt of the costs".
It has recommended 15 steps to protect the country from natural hazards. They're grouped in four areas: strategy and legislation, information to make the right decisions, funding and insurance.
Evidence suggests high insurance premiums or unavailability of insurance has a stronger impact on private decisions like whether or not to purchase and renovate coastal property. Climate risk is likely not currently incorporated into the price of residential coastal property.