Another storm, more cost - and one of our biggest insurers says we are not ready
Wednesday, 10 June 2026
Another storm, more damage - for many New Zealand communities, severe weather events that once felt exceptional are becoming a familiar part of life.
Wellington’s south coast was evacuated overnight Monday and Tuesday morning as huge swells sent waves pounding overland and the mayor declared a state of emergency.
It’s not even the first one this year.
After a year of a record 48 storms battering the country and repeated states of emergency declared, the nation's largest insurer is warning the country is still dangerously underprepared for a future of more frequent and costly natural disasters.
Read more:
Wellington south coast waves may not have reached full potential: MetService
Empty homes, rising bills and a lucky cat: Wellington’s slow flood rebuild
And they are more frequent, more life threatening and more expensive.
IAG New Zealand has released a major report arguing the country's approach to managing natural hazard risk is fragmented, under-resourced and too heavily focused on responding to disasters after they occur rather than reducing risks before they strike.
The report, A long-term approach to natural hazard risk reduction, identifies 42 gaps in New Zealand's current system and called on the Government to develop a clear roadmap for improving how the country manages the risks posed by earthquakes, floods, cyclones and other natural hazards.
IAG New Zealand chief executive Phil Gibson said the country needed councils, communities, businesses and homeowners to play a role in reducing the risks they faced.
'But New Zealand does not yet have a complete or coherent approach to enable this, and we want to help,' Gibson said.
“New Zealand is one of the most natural hazard-prone countries in the world. Earthquakes, floods, storms and landslips are not exceptional events. They are an increasing part of our lives and economy and, as a country, we must adjust to what they demand of us.”
He said the problem was solvable but there were pieces of the puzzle that had to be added to the current approach if a better job was to be done of reducing risk.
“Our aim is to ensure that growing natural hazard risk does not become a chronic problem for New Zealand. If risk is well managed, the cost and harm it can create will be kept in check, with flow-on benefits for the cost and availability of insurance.”
Among its findings, is that New Zealand’s current approach is complex, fragmented and poorly coordinated, with councils often expected to shoulder responsibility without sufficient funding, tools or guidance.
It says the country lacked a clear strategy to reduce risk backed by straightforward objectives, incentives and governance to properly target, prioritise and monitor risk reduction.
There was also a lack of consistent and effective rules, frameworks and incentives to improve decisions on where and what to build to ensure safety and resilience, clear expectations about who pays, for what and when, and the means to pay for new and bigger risk-reducing solutions.
It also argues the true economic cost of disasters is not adequately reflected in planning and investment decisions.
Perhaps most significantly, the report says successive governments have increasingly focused on improving New Zealand's response to disasters rather than reducing the risks that create them.
According to the report, over the past 15 years, these hazards had imposed at least $64 billion in direct costs, averaging more than $4.2 billion per year, with most of the expenditure (around 95%) directed toward response and recovery, and only a small fraction of it spent on reducing future risk.
Gibson said the natural hazard risk was rising faster than New Zealand's ability to manage it.
The insurer warns that without further reform, repeated disasters could undermine economic growth, investor confidence and public finances.
The report calls on the Government to develop a long-term roadmap for risk reduction, arguing that delays and piecemeal action will ultimately prove more expensive than acting now.
“We recognise the practical and financial constraints and remain focused on enabling better decisions and more action to reduce avoidable costs and harm,“ Gibson said.
“The long-term benefit will be a more insurable, investable and economically stable New Zealand.“