Climate change

Preparing for climate change: planning for the future

The need to plan ahead has never been greater as New Zealanders grapple with the effects of climate change and the increasing prevalence of natural disasters, and experts are calling on New Zealanders to adapt to the risks increasing climatic conditions.

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The need to plan ahead has never been greater as New Zealanders grapple with the effects of climate change and the increasing prevalence of natural disasters, and experts are calling on New Zealanders to adapt to the risks increasing climatic conditions.

Climate change and severe weather are a greater threat than ever to New Zealand homes. According to the Lloyd’s of London Insurance Risk Index Report, New Zealand is the second most at risk country in the world when it comes to natural disasters, just behind Bangladesh. The facts can make for uncomfortable reading, and as climate change threatens us, it can benefit Kiwis to think long-term as they seek to protect their assets for the future.

The need to plan ahead has never been greater as New Zealanders grapple with the effects of climate change and the increasing prevalence of natural disasters, and experts are calling on New Zealanders to adapt to growing climate risks.

Whether it’s having a contingency plan, a “go-bag” in the event of a natural disaster, or even performing drills so you know what to expect, there are always things you can do to prepare for a climate-related event. There has never been a more pressing time than now to prepare for our climate reality.

Last year, Tower launched customer risk assessments for floods and earthquakes.  Tower is the first insurer to provide this level of transparency to customers with low, medium or high ratings, along with a breakdown of each risk's contribution to their premiums.

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Last year, Tower launched customer risk assessments for floods and earthquakes. Tower is the first insurer to provide this level of transparency to customers with low, medium or high ratings, along with a breakdown of each risk’s contribution to their premiums.

Building resilience will be essential for New Zealanders, and companies in the financial sector are developing tools to help people understand their climate risks and take action. Tower has introduced a new risk-based pricing model in recent years, calculating home insurance premiums based on individual weather-related exposures for floods and earthquakes.

Tower first rolled out risk-based pricing for earthquake risk in 2018 and introduced the model for indoor flood risk last year. Risk ratings are customer-oriented, and Tower is the first insurer to provide this level of transparency to customers with low, medium, or high ratings for floods and earthquakes, as well as a breakdown of the contribution of each risk at their premiums. While a small number of customers in exposed locations saw their premiums increase, nearly 90% of households saw the flooded portion of their premiums drop as a result of the changes.

According to Ron Mudaliar, director of underwriting at Tower, risk-based pricing has been introduced to make premiums fairer and more representative of the real risks each Kiwi home faces. He says Tower wants to engage with New Zealanders on climate-related risks and help households become more sustainable.

Ron Mudaliar, director of underwriting at Tower, said Tower wanted to engage with New Zealanders on climate-related risks and help households become more sustainable.

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Ron Mudaliar, director of underwriting at Tower, said Tower wanted to engage with New Zealanders on climate-related risks and help households become more sustainable.

Many homeowners are unaware of the risks their homes face, Mudaliar believes more accurate premiums will help inform and encourage Kiwis to take action to make their properties more resilient and sustainable.

“For example, if a customer in a risk area has built a wall or put their house on stilts to protect against flooding, we can take this into account,” he says.

“We believe that risk-based pricing can inspire people to make changes in their lives to lessen the impact of climate change on them, and encourage customers to take a more proactive approach to global warming. not be the ambulance at the bottom of the cliff. We want to identify high-risk homes and work with people to protect them.

Tower’s risk-based pricing models will include coastal flooding and coastal flooding by the end of 2023 and windstorms will follow, adds Mudaliar.

As Kiwis begin to make more sustainable choices, taking into account climate change, Tower has introduced new products, like EV and e-bike insurance, to evolve with the modern needs of its customers.

ANDREW ROBERTS

As Kiwis begin to make more sustainable choices, taking into account climate change, Tower has introduced new products, like EV and e-bike insurance, to evolve with the modern needs of its customers.

As protectors of our assets, leading insurers like Tower have an important role to play in shaping the behavior of New Zealanders and encouraging us to become more sustainable. As a company particularly well placed to discuss climate risk, Tower is in dialogue with government and local councils as they want to ensure communities are equipped with weather resilience measures such as flood walls.

“It’s not just about insurance or premiums,” adds Mudaliar. “It’s about working together on mitigation, seeing where we should build or looking at where we should have a managed retirement because of climate effects. It’s a long-term national program.”

At the customer level, Tower adds sustainability features to its products, driving meaningful sustainability actions for Aotearoa. Last September, the company introduced a durability benefit for home insurance customers, offering them an additional $15,000 payout in the event of total loss due to fire or flood on top of the sum insured. A person who makes a claim can use the money to purchase more durable materials for their home while it is being rebuilt.

Tower's new headquarters are located at 136 Fanshawe Street in a 6 Green Star Building, the move is part of the insurer's plan to reduce its carbon footprint.

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Tower’s new headquarters are located at 136 Fanshawe Street in a 6 Green Star Building, the move is part of the insurer’s plan to reduce its carbon footprint.

Tower’s climate efforts are complemented by a company-wide campaign to reduce its carbon footprint. Tower recently moved into a new 6 Green Star headquarters in Auckland’s CBD as it seeks to implement a comprehensive climate action plan.

The company also supports students embarking on a first global bachelor’s degree in climate change at the University of Waikato, and is the first company to support scholarships for the degree. Tower pledged $45,000 over three years to support Kiwi students.

Mudaliar says Tower is committed to helping Kiwis of every generation protect their assets and financial future by thinking long term.

“All of the measures we have taken are designed to help us support and protect the assets people own or use, and encourage them to make the right choices. As we look to the future, every New Zealander will need to take a long-term view.”

Head to the Tower website to know more.