Jimmy Higgins: Cyclone Gabrielle, weather impacts - building futures and protecting what matters a year on

OPINION

It’s been a year since homes, businesses and communities were impacted by the devastating North Island floods and Cyclone Gabrielle.

As we enter the first anniversary of these events I find myself contemplating what we need to do to achieve better outcomes for our communities.

Our largest city’s flood infrastructure and built environment was put to the ultimate natural hazard test, and unfortunately, it didn’t cope with the immense amount of rainwater that fell.

Some days later we experienced the wrath of Cyclone Gabrielle, delivering destructive winds, floods and landslips. As a country we entered a turning point on natural hazard risk that has changed our lives and impacted the lives of generations to come.

Early on January 28, 2023, I ventured into Auckland’s hardest-hit suburbs alongside our seasoned event recovery leaders. The waters had receded and, on first glance, everything seemed relatively normal.

Yet, the true scale of devastation became apparent upon meeting our customers. Many were in shock and unsure of how to begin the clean-up, with mud throughout their homes, furniture lodged in areas that only flood waters could have reached, and for many, last night’s dinner still on the kitchen cooktop.

This has reaffirmed my personal purpose to expedite recovery efforts and to advocate for a better pathway to ensuring communities can recover their losses as quickly as possible, protecting them from having to experience avoidable floods, and enabling them to safely exist within our changing climate environment.

Protecting existing communities from severe weather events is a complex problem with complex solutions.

We have seen some positive movements in achieving this through the assisted retreat of homes by local councils, central government and the insurance sector following these events.

The legislative efforts underway to empower local councils with greater say in development decisions are a step in the right direction. Yet, the pace of change remains frustratingly slow, with consents still being issued for construction in areas prone to flooding and landslides.

Critical questions loom over the adequacy of our infrastructure to withstand future floods and the standards of sustainability and insurability we must demand in new developments.

One would think that as we build new communities, that mitigating natural hazard risk would be at the forefront of the design, development, and construction of newer homes. Sadly, this is not the case, and we are still building homes in known flood risk areas.

Jimmy Higgins, Suncorp New Zealand chief executive. Photo / Supplied

The facts: The recent Auckland Monthly Housing Update in January 2024 reported that:

· In November 2023, 169 dwellings were consented within hazard zones;

· In the last 12 months, 2201 dwellings were consented inside hazard zones, which include flood plains, areas prone to flood and area exposed to coastal erosion and inundation.

These prompt questions:

· When consenting these developments, are investments and decisions being made into the infrastructure (above and below ground) to mitigate against a one in 50 year or one in 100 year flood?

· What are the mitigation standards we should be setting when building communities, and protecting Kiwis from future natural hazard risks?

· How do decision-makers and planners assess the natural hazard risk that they ultimately want Kiwi homeowners and business to accept?

· What considerations are being given to building sustainable homes that attract affordable insurance?

It is a guarantee that when these homes are eventually built and sold, the new homeowners will be looking to protect their biggest asset by insuring their risk to future natural hazards. It is only at this point that the insurance sector becomes involved, and so begins the risk assessment and underwriting process to determine the appropriate premium for the risk we are being asked to protect.

It’s not until we assess these homes through our underwriting process that we are able to assess and accept the risk and set an appropriate premium.

Insurance coverage is necessary for banks to approve mortgages, and as we enter a new paradigm of increased severity of natural hazards, insurance accessibility becomes even more important and will be critical to support sustainable communities.

There is a much-needed conversation to be had on all these points, and I’m not for a moment suggesting that the solution is an easy one. Risk is at the core of our expertise; increased dialogue around these challenges must involve a concerted effort between policymakers and developers and also the insurance and financial services sectors, to ensure our communities are protected from the greatest physical and financial risks of natural hazards.

Whether you are a climate sceptic or not, one thing is for sure – we are seeing more frequent and severe weather events, and the imperative for New Zealand to bolster its defences against these threats is becoming increasingly urgent.

Global reinsurance markets understand this. Our collective role to reassure them that not only do we understand the hazards in New Zealand, but we have a co-ordinated, long-term plan to protect homes, businesses and future communities.

At the passing of each anniversary of these events, we must be able to affirm our progress in building futures and protecting what matters to both the reinsurance market and our communities. Are we doing enough?

- Jimmy Higgins is the chief executive of Suncorp New Zealand.