The report, which complies with the Aotearoa New Zealand Climate Standards (NZ CS 1-3), outlines Vero’s evaluation of climate risks and its strategies for addressing them.
Tom Hinds, executive officer at Suncorp, said the report demonstrates how climate change is affecting both local communities and the insurance industry, underscoring the necessity for prompt action.
“New Zealand’s ability to adapt is vital for everyone’s success. This report details our progress in assessing climate risks and shares our plans to help build a more resilient future,” he said.
Vero’s scenario analysis projects that, without significant mitigation, physical risks from climate change – such as flooding, storms, and coastal inundation – will increase by 2050.
The report estimates that average annual losses from extreme weather could rise by 19% to 26% by mid-century, driven primarily by sea-level rise and more frequent surface water flooding. The South Island is identified as a region facing heightened exposure.
The report also identifies a concentration of risk among a small portion of properties. Less than 1.5% of insured coastal properties are expected to account for all projected coastal inundation losses, while under 2% of inland properties are linked to 30% of forecast flood-related losses.
Hinds said: “If left unaddressed, the rising risks will lead to increased costs for all insurers, including higher claims and reinsurance, which in turn may affect the cost and availability of insurance cover.”
He further stated that adaptation measures, such as hazard mitigation and resilience investment, will be necessary to manage these risks.
Vero has outlined several steps to manage its own exposure and support broader resilience efforts. These include investments in advanced flood modelling, updated underwriting practices, and more detailed risk pricing.
The insurer has also expressed support for the government’s National Adaptation Framework and intends to work with public and private stakeholders to accelerate the implementation of climate adaptation priorities.
“Our commitment is twofold. First, to ensure the resilience of our business so we can continue to be there for our customers when they need us most. Second, to advocate for the investment and action needed to build a more climate-resilient and safer Aotearoa New Zealand for all Kiwis,” Hinds said.
The government’s launch of the National Adaptation Framework aims to coordinate the country’s response to climate-related risks.
The Insurance Council of New Zealand (ICNZ) has described the framework as a foundational step for strengthening climate resilience and maintaining insurance accessibility.
ICNZ chief executive Kris Faafoi said the framework clarifies the respective roles of government, the private sector, and communities in managing climate risks.
“The government’s focus on clear roles and responsibilities, better information on natural hazard risks, and investment in risk reduction are all steps in the right direction,” he said.
A key requirement under the framework is for local councils to prepare 30-year adaptation plans for areas most at risk from flooding and coastal hazards. These plans will outline proposed actions, associated costs, and funding strategies.
Faafoi emphasised the importance of timely action.
“Adaptation needs to be accelerated. Some vulnerable communities are already facing repeated losses, and they can’t afford to wait five years for plans and longer still for adaptation projects to get underway,” he said.
The framework is structured around four pillars: improving risk and response information, clarifying roles and responsibilities, investing in risk reduction, and establishing cost-sharing mechanisms for disaster situations.
One significant initiative is the creation of a National Flood Map, which will provide accessible information about flood risks and is expected to be available by 2027.
“We want the best minds in modelling and technology, nationally and internationally, to help us tackle this,” said Climate Change Minister Simon Watts.
New legislation will also clarify the responsibilities of local government in high-priority areas.
“The new adaptation plans will help people understand what the risks are, how this will be managed, and what investment will happen in their area, so people know what to expect,” Watts said.
