ICNZ refutes "uninsurable" allegation
21 Mar 2017
Projections that properties in South Dunedin and other low-lying areas will be uninsurable in five years are "highly, highly improbable", the Insurance Council of New Zealand (ICNZ) has said.
The comment was a response to Professor Jim Flynn of the University of Otago, who said last week that huge erosion of polar ice that had begun in 2014 meant predictions on the rate of climate change had changed, and areas like South Dunedin would be uninhabitable in 17 years, and unable to be insured in five.
ICNZ Chief Executive Tim Grafton said that the insurance council had not seen the evidence from Prof Flynn, but it was widely accepted projections for sea level rise would be between 28cm and 98cm by the end of the century, reported Otago Daily Times.
He said: "Insurers have ongoing awareness of South Dunedin, including the June 2015 flood, the concerns about rising ground water and the impact of sea level rise, and evaluate these sorts of risks throughout the country."
Insurers set their premiums and terms based on the estimated risk level for the coming insurance period. Sea level rise and rising ground water are unlikely to influence those now, but may progressively increase over time. Any insurance impact would vary from property to property, depending on the degree of exposure and risk.
Mr Grafton added: "What we’re saying is that insurers, in terms of gauging their appetite for flood risk, will probably be more reliant on more widely accepted scientific projections.
"The suggestion there would be no insurance available in South Dunedin in five years I think is highly, highly improbable."
However, insurers are headed in a "grey but certain direction".
"The certain direction is the sea level will rise, the grey area is when the sea will rise sufficiently to cause flooding of such a frequency that causes damage so frequently insurers will start responding to how much risk they want to take on, and how they want to price that risk if they do want to take it on," Mr Grafton said.