News Non-Life25 Jun 2018

New Zealand:Govt urged to look at likelihood of insurers shunning high-risk areas

25 Jun 2018

The government needs to consider the possibility that insurers will withdraw from high risk locations, says Professor Ilan Noy, chair in economic disasters at Victoria University.

Risk-based pricing is already hiking the cost of insuring homes in earthquake prone areas – and could soon have the same impact on coastal zones, reports TV New Zealand.

Prof Noy said, "We are worried that the insurance sector will start or is starting to withdraw from various locations… and we are sort of in the dark about that."

A proposal has been raised for insurance companies to disclose when they’re going to pull out of certain areas. But the insurance industry says such mandatory reporting would make little difference.

Government response

The government says it's too early to consider regulations.

"We're currently nowhere near that level of recommendation yet," Climate Change Minister James Shaw said.  "I completely understand the concern. It's a trend we are paying very close attention to."


 

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