New Zealand has recorded $NZ64 billion ($59.08 billion) of natural hazard costs since 2010, with expenditure favouring recovery rather than long-term resilience, according to IAG.  

The insurer says a breakdown of government spending shows 97% went on natural catastrophe responses, including $NZ19 billion ($17.54 billion) on recovery efforts and $NZ14 billion ($12.92 billion) through the public insurance scheme.

Private insurers spent $NZ31 billion ($28.62 billion) in the period.  

Responses to the 2011 Canterbury earthquakes, the 2016 Kaikoura quake and 2023’s North Island flooding and Cyclone Gabrielle accounted for much of the costs.  

The report says the total spent is probably much higher, given the research does not consider local governments or wider social and economic natural hazard costs.  

IAG New Zealand CEO Amanda Whiting says the costs “represent a drag on our economy”, and more mitigation investment is needed.  

“It is clear we need to do more to reduce natural hazard risk, especially when we know there is a strong case for doing so,” she said. 

“International research shows that a dollar invested in risk reduction can reduce spending on response and recovery by four dollars.”  

She says the nation must “prioritise improving how the actual costs of natural hazard events are recorded by central and local government, so we know how much we are spending, on what and where.

"Alongside this, we must quickly move to understand the underlying trends, regularly model the expected financial impact of natural hazards, set relative benchmarks and closely monitor changes in risk.” 

Ms Whiting says fixing the “incomplete understanding” of natural hazard costs will “enable better decisions to be made on when, where and how to reduce risk. 

“This is becoming even more important as natural hazard events increase in frequency and severity.”  

See the IAG report here.