Concerns about ageing infrastructure, funding gaps, and fragmented planning across Canterbury are raising new risk considerations for insurers, reinsurers, and brokers assessing long-term exposure, resilience, and insurability across the region’s transport and lifeline assets.
A recent white paper, Connecting Canterbury: Strengthening Infrastructure for Growth, published by Infrastructure New Zealand and Simpson Grierson, warns that deteriorating bridges, culverts, and freight routes could reshape risk assumptions tied to business interruption, catastrophe modelling, and municipal credit quality if investment does not accelerate.
The report highlights local transport structures as a case study in infrastructure exposure. One Canterbury district operates roughly 280 bridges across about 1,500 kilometres of local roads, with a combined replacement value of about $400 million. Around 100 of those bridges may require replacement within 30 years. Analysts estimate annual renewal spending would need to reach roughly $4.75 million to meet that demand, compared with current funding of about $200,000.
Closing that gap through rates alone would require an estimated 60% increase in roading rates, raising questions about financial sustainability and long-term service reliability—factors insurers monitor when evaluating municipal risk and infrastructure resilience.
Catherine Shipton, infrastructure partner at Simpson Grierson in Canterbury, said the region could set a benchmark for coordinated infrastructure planning if stakeholders align around long-term programmes rather than isolated projects. She said the post-earthquake rebuild demonstrated what coordinated delivery at scale can achieve and that applying similar discipline to lifeline infrastructure is now the challenge.
The white paper also examines a key inland freight bridge that carries over-width and over-length loads unable to use State Highway 1 tunnels. The structure is expected to require a $15 million replacement within five years. Without investment, weight limits or a reversion to a ford for heavy vehicles could occur, potentially disrupting supply chains and increasing contingent business interruption risk.
Nick Leggett, chief executive of Infrastructure New Zealand, said parts of Canterbury hold hundreds of millions of dollars’ worth of bridge assets, many of which will require replacement within a generation. He said the current funding model does not match the scale or lifespan of those assets and described reverting to a ford as “not resilience” but “managed decline.”
To address funding constraints, the report recommends bundling bridge and culvert renewals into region-wide programmes to create scale and attract private capital. It also proposes forming a Canterbury Infrastructure Coordination Group to align central and local government priorities and suggests alternative funding tools such as public-private partnerships, asset recycling, and value-capture mechanisms where appropriate.
It calls for whole-of-life asset management standards and stronger climate-resilience requirements across the network. For insurers, these structural changes could affect assumptions around infrastructure failure probabilities, repair timelines, and catastrophe loss severity.
The Canterbury findings coincide with Infrastructure New Zealand’s response to Te Waihanga's National Infrastructure Plan 2026, which outlines a 30-year pipeline estimated at $275 billion. Leggett described the plan as an important contribution to policy debate but argued that improving capital productivity is now the sector’s central challenge.
He said New Zealand likely spends enough on infrastructure overall but does not consistently achieve adequate returns, making delivery efficiency the key issue to solve. The plan notes that the country has invested about 5.8% of GDP annually in infrastructure over the past two decades yet still ranks near the bottom among peers for efficiency and value for money.
It also highlights pressures from ageing assets, rising construction costs, fiscal constraints, and increasing natural hazard exposure. The document does not allocate funding to specific projects, leaving prioritisation decisions to governments.
Infrastructure New Zealand supports prioritising maintenance and renewals before new builds, noting these could absorb up to 60 cents of every infrastructure dollar. For insurers, that sequencing affects when risk-mitigating upgrades may occur, particularly in hazard-prone regions.
Alongside infrastructure funding concerns, researchers are examining overseas insurance systems for lessons on managing catastrophe risk. Associate professor Rohan Havelock, an insurance law specialist at the University of Auckland, is studying Japan’s earthquake insurance framework as a potential reference point for reforms.
He said Japan prices earthquake premiums based on factors such as location, building age, construction, and seismic strength, aligning premiums more closely with risk. By contrast, New Zealand’s statutory natural hazards cover uses a flat levy of 16 cents per $100 of insured building value, regardless of property risk. Havelock said this structure means owners of higher-risk homes are subsidised by those in lower-risk areas and reduces incentives to strengthen buildings or relocate from hazard-prone zones.
Japan also classifies losses into four categories - total, large half, small half, and partial - with cash settlements tied to those categories. Havelock said insurers there routinely offer re-inspection or review of decisions, resolving many disputes before they escalate, and that few cases proceed to litigation.
New Zealand’s dual public-private catastrophe model has already been tested. After the Canterbury earthquakes, more than 460,000 claims were lodged with the former Earthquake Commission, contributing to long delays, extensive litigation, and the failure of two insurers, with some claims unresolved for years.
Since then, lawmakers have enacted the Natural Hazards Insurance Act 2023 and the Contracts of Insurance Act 2024. Under the current system, statutory cover administered by the Natural Hazards Commission Toka Tū Ake responds first up to set caps, with private insurers covering losses above those limits.
Havelock said further reform may still be necessary, particularly around standard policy terms, claims handling, and dispute resolution processes, to ensure the framework performs effectively after a major seismic event.
Taken together, Canterbury’s infrastructure funding gap, national debates about investment efficiency, and international comparisons of catastrophe insurance models point to evolving underwriting and pricing considerations. The developments influence risk selection, capital allocation, catastrophe modelling assumptions, and long-term portfolio exposure across both public-sector and commercial lines.
