15 Mar 2015

Insurance Council signs to UN disaster plan

10:43 am on 15 March 2015

The Insurance Council has joined scores of other private sector organisations in signing up to a United Nations plan to lower the impact of natural calamities.

Insurance Council chief executive Tim Grafton

Insurance Council chief executive Tim Grafton Photo: RNZ / Jonathan Mitchell

The agreement was reached at a conference in the Japanese city of Sendai, which was the site of a catastrophic earthquake and Tsunami in 2011.

The conference was addressed by the United Nations Secretary General, Ban Ki Moon.

It aims to reduce the risk and the impact of disasters in advance as a way of making insurance costs more sustainable.

Insurance premiums in this country more than quadrupled in the wake of the Canterbury Earthquakes and are only now inching back down.

One way to lower the impact of disasters would be to reduce the scale of climate change, which would lessen the incidence and severity of extreme weather.

This was specifically mentioned in the Secretary General's speech.

Chief executive of the Insurance Council Tim Grafton said a country like New Zealand could make things easier by harmonising legislation that deals with natural disasters and by improving the efficiency of crisis management.

The council published a booklet last year calling for single agency management of natural disasters.

This came after constant criticism of the way New Zealand handled the aftermath of the Canterbury earthquakes.

Much of this focussed on difficult relations between the Earthquake Commission and the private insurance market, as well as the complications arising from several destructive earthquakes in succession.

The global annual price tag for natural disasters is $450 billion a year, far in excess of New Zealand's entire economy.