Latest / Early Edition with Ryan Bridge / Jonathan Boston: Victoria University Emeritus Professor of Public Policy on the impact of severe weather, insurance

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Jonathan Boston: Victoria University Emeritus Professor of Public Policy on the impact of severe weather, insurance · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Insurers filling a raft of major weather events. IAG says
• 0:04
  Speaker 1: claims are up almost two hundred and fifty percent on
• 0:07
  Speaker 1: last year. That's about thirty three thousand claims from forty
• 0:10
  Speaker 1: six events. AMI and State boss Phil Gibson says, if
• 0:13
  Speaker 1: you want insurance to stay affordable, we've got to cut
• 0:15
  Speaker 1: the risk. Jonathan Boston, Victoria University Emeritus Professor of Public Policy,
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  Speaker 1: joins me this morning.
• 0:20
  Speaker 2: Jonathan, Good morning, Good morning, Ryan.
• 0:22
  Speaker 1: Are you and Wellington? How was the rain last night?
• 0:25
  Speaker 2: Oh, the rain last night was fine, relatively speaking. It
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  Speaker 2: was yesterday morning that was the tremendous downpour we had,
• 0:34
  Speaker 2: and we seem to have been pretty well in the
• 0:36
  Speaker 2: center of it. Our street, right Street was flooded at
• 0:39
  Speaker 2: the bottom with cars being floated away and several houses damaged.
• 0:45
  Speaker 2: So not good. And unfortunately, as you've indicated, Ryan's more
• 0:50
  Speaker 2: storm events are happening with greater frequency in New Zealand
• 0:53
  Speaker 2: and of course around the world, and that is all
• 0:55
  Speaker 2: exactly a scientists expected as a result of us.
• 0:58
  Speaker 1: Warming the planet, and the insurance companies have said as
• 1:01
  Speaker 1: much as storms every two weeks now. They reckon so
• 1:05
  Speaker 1: and people are making claims for them. So what happens
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  Speaker 1: from here Do the insurance companies start pulling back on
• 1:10
  Speaker 1: who they cover or do they up the premiums?
• 1:14
  Speaker 2: Well, they're doing both already, Ryan, and that process will
• 1:18
  Speaker 2: continue almost inevitably. My own view is that we need
• 1:24
  Speaker 2: to rethink the way we organize our overall property insurance
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  Speaker 2: arrangements in New Zealand, and that really applies to not
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  Speaker 2: just residential property, but also non residential property and properly
• 1:35
  Speaker 2: government property as well. At the moment, very briefly, we
• 1:39
  Speaker 2: have a situation where the Natural Hazards Commission previously called
• 1:43
  Speaker 2: EQUC insures residential property up to three hundred thousand, assuming
• 1:52
  Speaker 2: that those properties have insurance policies, but only for geophysical
• 1:57
  Speaker 2: events like earthquakes and tsunami and so forth. If it
• 2:00
  Speaker 2: doesn't ensure such properties for flooding, severe wind events and
• 2:04
  Speaker 2: so on. And my view is that we need to
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  Speaker 2: rethink that we need to extend the coverage of the
• 2:09
  Speaker 2: Natural Hazards Commission across a wider range of perils. We
• 2:12
  Speaker 2: need to make it responsible for helping to enhance the
• 2:16
  Speaker 2: resilience of properties, and probably we need to make it
• 2:20
  Speaker 2: or another government agency responsible for helping to move the
• 2:26
  Speaker 2: properties that simply can't be protected out of harm's way,
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  Speaker 2: so that people aren't living in areas that are going
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  Speaker 2: to be highly flood prone.
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  Speaker 1: Jonathan, the QC Levy, The kitty is already beer or
• 2:38
  Speaker 1: the cupboards are almost beer on that kitty anyway, So
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  Speaker 1: you will would be paying more a eqc levies to
• 2:45
  Speaker 1: expand the cover to storms. Why do it that way?
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  Speaker 1: Why not just have insurance cover as insurance cover and
• 2:51
  Speaker 1: if you can't get it, you can't get it moved.
• 2:55
  Speaker 2: Well, I mean, the problem with the second option you've
• 2:57
  Speaker 2: just put is that more and more people will find
• 2:59
  Speaker 2: themselves of having uninsured properties that will increase suffering, inequality
• 3:06
  Speaker 2: or manner of downstream social effects, which will inevitably then
• 3:10
  Speaker 2: increase societal costs and economic costs. In other words, if
• 3:14
  Speaker 2: we become less resilient of a society because more and
• 3:17
  Speaker 2: more people can't ensure their properties, that will be damaging
• 3:20
  Speaker 2: ultimately to everyone. So my view is that we need
• 3:23
  Speaker 2: to try and maximize our levels of economic and society
• 3:28
  Speaker 2: or resilience through insurance, through adaptation qualities of various kinds,
• 3:33
  Speaker 2: through other mechanisms, and that yes, you're quite right, the
• 3:37
  Speaker 2: kitty is bare. That's partly because the government decided not
• 3:40
  Speaker 2: to increase the levee. My view is that that was
• 3:44
  Speaker 2: an unfortunate mistake on the part of the government. We
• 3:47
  Speaker 2: should increase the levee, but also I think we should
• 3:52
  Speaker 2: increase the levee cap as it stands as a cap
• 3:55
  Speaker 2: at the moment of four hundred and eighty dollars per
• 3:58
  Speaker 2: residential propertys CST. That should be raised so that people
• 4:03
  Speaker 2: with better off or more valuable homes are paying a
• 4:09
  Speaker 2: greater amount towards the towards Robot's now called the Natural
• 4:14
  Speaker 2: Hazards Commission.
• 4:15
  Speaker 1: Jonathan, appreciate your time this morning, Jonathan Boston, Victoria University,
• 4:18
  Speaker 1: Emeritus Professor of Public Policy.
• 4:20
  Speaker 2: For more from Early Edition with Ryan Bridge, listen live
• 4:24
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• 4:27
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