Suncorp NZ CEO urges bold climate strategy to secure reinsurance future

Suncorp NZ CEO urges bold climate strategy to secure reinsurance future | Insurance Business New Zealand

Catastrophe & Flood

Suncorp NZ CEO urges bold climate strategy to secure reinsurance future

Recent disasters led to more cautious stance from reinsurers, says executive

Catastrophe & Flood

By
Roxanne Libatique

Suncorp New Zealand CEO Jimmy Higgins has underscored the importance of a comprehensive national strategy to address natural hazard risks.

Speaking to Interest.co.nz, the executive emphasised that such measures are necessary to restore global reinsurers’ confidence in New Zealand.

“They never expected the losses from a flood in Auckland. It was never in their models, and they never expected a cyclone of the level that we saw in the Hawke’s Bay region,” he told Interest.co.nz.

During the 2024 financial year, Suncorp NZ paid out $1.2 billion in claims, including approximately $600 million for property-related losses and $400 million for vehicle claims. The company had allocated $1.36 billion for natural hazards, with actual costs coming in $125 million under budget.

How to restore reinsurers’ confidence in New Zealand

Suncorp’s projections indicate that surface flooding losses could rise by 20% by 2030 and by 50% by 2050.

Higgins said that for the reinsurance market to regain its previous appetite, New Zealand must show progress in understanding and mitigating natural hazard risks.

“Is the maintenance of that infrastructure appropriate?” he said. “Are we clearing gutters [and] stormwater systems? How are we dealing with those areas that we know are more exposed to surface flooding?”

Calls for improving climate risk resilience

Earlier in the year, Higgins called for enhanced central coordination on climate adaptation. This call was partly addressed in May when Climate Change Minister Simon Watts directed the Finance and Expenditure Committee to develop a framework for managing the risks and costs associated with future extreme weather events.