'Stop building in areas prone to floods,' says Tower Insurance boss

New Zealand insurer Tower Insurance boss Blair Turnbull recently shared his thoughts on a marked downturn for the company, citing the effects of the Auckland Anniversary floodings and the more recent Cyclone Gabrielle as the biggest factors. Addressing these devastating weather events, Turnbull said that “we need to stop building in areas that are prone to floods and coastal erosion” in order to avoid disasters like the recent ones in the future.

“We need to help communities to face into that,” Turnbull said. Admitting that his opinion could be unpopular, he added, “it’s tough to talk about it. It’s a managed retreat. But we need to start talking about it, and we need to help transition some of those communities away from flood-prone areas.”

Turnbull is not the only executive who has discussed needed changes within NZ infrastructure given the recent calamities. ICNZ chief Tim Grafton recently said that Aotearoa must “build back better” as a response to the extreme weather events in order to mitigate severe economic and personal losses.

“Inevitably, we’ll see higher reinsurance costs and higher premiums”

“The last two years we’ve all been talking about the pandemic and inflation that always keeps rubbing us in back pockets,” Turnbull told NZ Herald when asked about the possibility of higher premiums. “We’ve managed to weather that one, now we’re getting storms. Inevitably, if inflation and these storms continue, it will result in higher reinsurance costs and higher premiums.”

Turnbull said that despite the company’s efforts to invest in technology and efficient operations, allowing Tower Insurance to absorb a lot of the costs associated, insurance premiums will inevitably go up “to reflect higher inflation.”