New Zealand’s Natural Hazards Commission Toka Tu Ake has published its first statement of investment policy and objectives, detailing its strategy to ensure sustainable funding.

It outlines a primary long-term objective to achieve returns that surpass inflation by 2.5% a year over rolling five-year periods, with a secondary objective to outperform composite benchmarks.  

The NHC collects an annual levy from insured homeowners and the current balance of its fund is $NZ650 million ($555.99 million).

It was depleted following the 2011 Canterbury earthquakes and the commission has since adopted a conservative fundraising approach.  

A new executive investment committee, comprising senior leaders and independent experts, has been established to oversee investment performance.

Day-to-day management will be delegated to third-party investment managers.

NHC CFO Chris Chainey says the agency will take a “staged approach” to having a diversified portfolio that “supports sustainable growth, while continuing to manage risk carefully”.  

The agency says it will consider environmental, social and governance factors in its investment strategy.  

“NHC is confident the [statement] provides a strong, disciplined foundation for growing the fund over time, building financial resilience and ensuring New Zealand is better prepared to meet the cost of future natural hazards,” Mr Chainey said.

See the statement here.