Planning authorities need more power to stop development in areas of significant natural hazard risk, the Insurance Council of New Zealand has told a government consultation.

The government should also prioritise and resource scientific research to support local councils with evidence of risk, it says in a submission to the Environment Ministry’s consultation on a proposed National Policy Statement for Natural Hazards.

Councils also need better legal protection against costly challenges by developers.

The natural hazards policy statement aims to improve how risks are considered in planning decisions. It would apply to flooding, landslips, coastal erosion, coastal inundation, active faults, liquefaction and tsunami.

ICNZ seeks clarification that storm surges will be included, and says they could be a distinct but related natural hazard to flooding, coastal inundation and tsunami. It also recommends including wildfires.  

Insurers appreciate the nuances of the risk-based approach in the policy statement, whereby aged care facilities would have different exposure from warehousing, ICNZ says. But “from an insurance perspective, the financial value of claims arising from insured losses does not discriminate in this way”.

Accepting differences in financial exposure arising from different activities could lead to avoidable losses and affect whether insurance is available.

The proposed statement gives risks ratings of significance, and ICNZ says while it supports this “in general”, insurers may have different tolerances based on risk appetites and commercial strategies.

While the policy statement is a critical first step, at present “it does not have sufficient regulatory backing to materially improve natural hazard risk management in New Zealand”.

Read the submission here.