Nearly half (46%) of New Zealanders want more information about their property's exposure to climate-related risks and natural disasters according to a new report.
The new 14-page research Weathering change: attitudes to climate risk and resilience in New Zealand also reveals that an overwhelming (86%) majority of those surveyed believe it’s important to have information about their property’s risk profile.
The study was conducted by Tower insurance to assess the attitudes to risk and resilience as it expands its risk-based pricing model and property risk ratings across the country.
A media release by Tower said the report has been released as the insurer expands its risk-based pricing and public risk ratings tool to include landslide and sea surge risks. Tower was the first New Zealand insurer to introduce risk-based pricing for earthquakes in 2018, followed by inland flooding in 2021.
The move aims to bring greater transparency to how climate and natural hazard risks are reflected in Tower’s insurance premiums – and to help Kiwi better understand the risks their homes face.
Tower CEO Paul Johnston said, “As weather events become more frequent and extreme it’s important people have information about the risks that could affect their property.
“We want to help people become more resilient to the impacts of climate change and prepared for the future. Like most Kiwi, we believe people should only pay for the risks that apply to their homes, not someone else’s. Expanding our risk-based pricing model is a fair and transparent way to support this.”
According to the report 70% of New Zealanders think it’s fair for insurance premiums to reflect each individual property’s risk, and 68% support higher premiums for homes more prone to weather or natural disaster damage.
Mr Johnston said, “Tower’s evolution of risk-based pricing reflects New Zealand’s need to be more prepared. As a nation, we must focus our collective efforts on climate change adaptation, which is what will ultimately help keep insurance accessible and affordable in the long term.”
Tower’s risk-based pricing model uses detailed data and analytics to enable the company to assess the likelihood an individual property will be impacted by a certain type of weather event or natural disaster and the estimated cost of repairing damage. It aims to remove cross-subsidisation so that customers only pay for the risks their homes face, not anyone else’s.
With the latest addition of landslide and sea surge risk ratings, over 90% of Tower customers will now receive a reduction in the natural hazards portion of their premium, with average savings of $70 per property. Fewer than 10% of properties (those with higher sea surge or landslide risks) will see an increase in the natural hazards portion of their premiums, proportionate to their level of risk.