An uninsurable future?

Key points from expert talk

• Climate change threatens the future insurability of homes, businesses and infrastructure. As climate-related disasters become more frequent and severe, insurance costs are rising, insurance retreat is accelerating, and more properties are likely to become uninsurable.
• An insurance crisis could become a broader financial crisis. Declining insurability threatens property values, mortgage lending and financial stability, with the potential for systemic economic impacts extending well beyond the insurance sector.
• Rising insurance costs will deepen social and economic inequality. Higher premiums and reduced access to insurance disproportionately affect lower-income households, while uninsured and underinsured communities face greater hardship and slower recovery after disasters.
• Current trends are increasing New Zealand’s exposure to insurance retreat. More frequent extreme weather, accelerating sea-level rise and continued development in high-risk areas are increasing the number of properties vulnerable to flooding, erosion and other climate hazards.
• A market-led response is unlikely to deliver a resilient or equitable outcome. Relying solely on risk-based pricing would leave many households unable to relocate or recover from disasters, increasing long-term social and economic costs.
• A stronger public role is needed to manage growing climate risks. The talk proposes expanding the role of the Natural Hazards Commission to include weather-related risks, support adaptation, and help maintain affordable insurance through collective risk-sharing.
• Long-term insurability ultimately depends on reducing climate change. Even the strongest insurance system cannot manage unchecked climate impacts, making rapid emissions reductions and effective climate adaptation essential to maintaining an insurable future.