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Speaker 1: It's not like we didn't warn you. We've got more

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Speaker 1: insurance increases coming our way. The government has a shortfall

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Speaker 1: at the Natural Hazards Commission, which once upon a time

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Speaker 1: is called the EQC. At this stage it looks like

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Speaker 1: we're going to be paying another two hundred dollars per

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Speaker 1: year per household.

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Speaker 2: No.

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Speaker 1: Chris Farvoy is the boss of the insurance counsel and

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Speaker 1: is back with us. Chris, morning to you.

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Speaker 2: Good morning, Mikee.

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Speaker 1: So this isn't really your fault, is it.

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Speaker 2: No, it's not, but it is necessary and I think

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Speaker 2: you know we've in the herod this morning. Ministerine was

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Speaker 2: I think trying to strike the right balance of making

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Speaker 2: sure that the Natural Hazards Commission has got enough money

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Speaker 2: in the catty there. But also I think he's aware

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Speaker 2: of the cost of learning pressures on consumers and how

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Speaker 2: people feel about that when it comes to their insurance premium.

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Speaker 2: So you know, it's one of those things we need

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Speaker 2: to make sure it does have money in it because

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Speaker 2: it's the first one to pay out, the Natural Hazards Commission.

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Speaker 2: But at the same time people are finding things difficult

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Speaker 2: at the moment.

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Speaker 1: Does it make it easier for you because the more

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Speaker 1: they pay out, the less we tap.

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Speaker 2: You look that they were always going to pay out

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Speaker 2: a said amount, and so you know, making sure that

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Speaker 2: they've got enough money to pay that is obviously important.

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Speaker 2: If they didn't then to afford on the government, so

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Speaker 2: taxpayers would put the bill anyway. But before private insurance

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Speaker 2: companies can pay out, the Natural Hazard Commission has to

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Speaker 2: pay out, so really in the way that that the

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Speaker 2: market is structured, that's really important. I think that the

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Speaker 2: thing here is obviously the impact on consumers themselves, and

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Speaker 2: from our perspective, when prices of premiums go up, people

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Speaker 2: have to make some difficult decisions sometimes, so we want

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Speaker 2: to make sure that people maintain the appropriate level of

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Speaker 2: insurance cover for them because I think the last thing

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Speaker 2: we want to have is people under insurance, so not

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Speaker 2: having enough insurance to replace what they've got, but you know,

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Speaker 2: and the worst case scenario having no insurance at all,

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Speaker 2: so that would make pretty difficult for.

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Speaker 1: The worst and New South Wales very closely where you're

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Speaker 1: looking at areas we're now in Australia where you can

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Speaker 1: get insurance but at forty five thousand dollars for a

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Speaker 1: premium per year, no one can afford it. Obviously, how

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Speaker 1: close to that are we here in certain parts of

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Speaker 1: the country.

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Speaker 2: Look, I think if we look at risks across the board,

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Speaker 2: if we don't do things to reduce the risk over

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Speaker 2: time because of what we're expecting, whether obviously seismic has

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Speaker 2: always been there, then insurance are going to be a

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Speaker 2: tougher ask. So one of the big things that we've

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Speaker 2: pushing for is what are we doing to make sure

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Speaker 2: that we're doing as much as we can to reduce

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Speaker 2: the risk of flooding For some areas which are highly

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Speaker 2: likely to be flooded more regularly and more severely, we've

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Speaker 2: had a big wake up call a couple of years ago.

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Speaker 2: So a big push from us is what are we

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Speaker 2: doing to get ahead of this? What infrastructure can we build?

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Speaker 2: Obviously prior signals are there as well, how we build planning.

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Speaker 2: You know, we've got to stop building and done places

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Speaker 2: if we know they're going to flood regularly, then they'd

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Speaker 2: stop doing that.

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Speaker 1: But that's the problem, isn't it? In places we are

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Speaker 1: still building, and that brings you it's too convoluted because

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Speaker 1: you've got you guys and insurance, you've got the central government,

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Speaker 1: and then you've got local government of course, and they

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Speaker 1: do something and you go, we'll hold on. That's no

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Speaker 1: good and central government goes, no, we shouldn't do that,

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Speaker 1: and next thing, you know, all you do is sending

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Speaker 1: me a bill.

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Speaker 2: Yeah, there's some lot at the end of the tunel.

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Speaker 2: The government's looking at some work being led by a

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Speaker 2: climate change of Minister Simon Watts. We've been party to that.

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Speaker 2: The banks and local government have been part of that.

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Speaker 2: One of the big things there, hopefully is some reform

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Speaker 2: of how we plan and decitisens we're making about land

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Speaker 2: you so we don't make things worse. I think we've

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Speaker 2: had generations of building and places where probably haven't been

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Speaker 2: that smart, and we've got the science now and the

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Speaker 2: ability to do something about it, so I hopefully we

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Speaker 2: can get out head of it because at the moment,

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Speaker 2: on the current settings, we're just doing what we've done

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Speaker 2: and making things worse. And at the end of the day,

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Speaker 2: you know, there's big payouts from private insurance companies and

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Speaker 2: governments to compensate where these things are happening.

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Speaker 1: Good on you, mate, nice to catch up, appreciate it.

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Speaker 1: Chris Barfoy, CEO Insurance Council of New Zealand.

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