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Speaker 1: Heller dup to see.

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Speaker 2: Allen, it's happened.

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Speaker 3: Thank god it happened, though, Am I right? FAM's god

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Speaker 3: it happened. We'll talk of it because I just who

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Speaker 3: wanted to sit around and wondering when it was going

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Speaker 3: to happen. We'll talk about that later anyway. Nine two

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Speaker 3: ninety two is the text number. Now Consumer has revealed

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Speaker 3: that insurance is the household bill that's gone up the

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Speaker 3: most in the past twenty five years. Get a load

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Speaker 3: of this. Insurance costs have gone up on average more

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Speaker 3: than nine hundred percent since the year two thousand. Basically,

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Speaker 3: everything is obviously more expensive than it wasn't two thousand,

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Speaker 3: but nine hundred percent is a massive jump. I mean,

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Speaker 3: the increase for Siggi's over that period is about six

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Speaker 3: hundred percent. Chris Fafoy is Insurance Council Chief Executive and

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Speaker 3: with us.

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Speaker 1: Now, hey, farf Hey the hell are you?

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Speaker 3: I'm very well, thank you? So why has it got

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Speaker 3: so much more expensive? Is it that there is a

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Speaker 3: legitimate reason or are you guys being greedy.

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Speaker 2: It's been a pretty busy quarter of a century out

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Speaker 2: of that period of time here, so you know, we've

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Speaker 2: had christ Church we've had Co Coda. More recently, we've

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Speaker 2: had the North Island with their events with Auckland floods

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Speaker 2: and Soyco and Gabrielle, all of those pretty major events,

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Speaker 2: billion dollar events. And as a reserve bank said last May,

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Speaker 2: when they track these things, when these big events happen,

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Speaker 2: you usually see an increase in and reinsurance costs and

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Speaker 2: insurance premiums. And obviously with you know, inflation affects us too.

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Speaker 2: When it costs more for building costs than kind of

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Speaker 2: rebuilding a house ends up being more expensive. So fair

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Speaker 2: they have come off the heat a little bit in

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Speaker 2: the short term, and hopefully, because we'll obviously know that

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Speaker 2: people are feeling the punch at the moment, hopefully we'll

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Speaker 2: see some softening of those increases.

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Speaker 3: So does that mean it's going to get less expensive

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Speaker 3: or just stop stop growing at the RTED.

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Speaker 2: Is its sertainly stopped growing out the right as. I

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Speaker 2: think the steps that came out showed that inflation is

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Speaker 2: coming back.

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Speaker 3: I understand the natural disaster stuff and that's fair enough.

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Speaker 3: But what about car car insurance increases and medical insurance increases, Well.

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Speaker 2: We don't look after medical. That's another outfit but you know,

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Speaker 2: car insurance is a good example where it has come

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Speaker 2: off the heat heather to the year. Of March of

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Speaker 2: this year, inflation around cars was about close to eight percent.

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Speaker 2: It's kind of backed off in June to close to

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Speaker 2: two percent. So, as I said, we're starting to see

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Speaker 2: things soften up.

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Speaker 3: So apparently about seventeen percent of people in one year

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Speaker 3: said they got rid of insurance because it was just

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Speaker 3: too expensive. Is there a point at which you guys

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Speaker 3: acknowledge that the prices cannot keep going up or we

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Speaker 3: will all start bailing out?

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Speaker 1: Yeah.

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Speaker 2: Look, I've questioned that number from consumersis and I know

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Speaker 2: I've done their survey, but that's not what our tracking

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Speaker 2: that we've been doing for some time has been showing,

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Speaker 2: especially around house insurance. Things like house and contents insurance

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Speaker 2: have been a challenge, and I think that's been the way.

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Speaker 1: That people have tried to pull back.

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Speaker 2: But we're weary of, you know, insurance premiums being a

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Speaker 2: challenge for ever run at the moment, given the cost

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Speaker 2: of living challenges, and again to Consumer New Zealand's points,

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Speaker 2: which we agree on substantively, the longer term challenge around

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Speaker 2: reducing risk for New Zealand has to happen a to

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Speaker 2: protect people from flooding that you know your listeners would

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Speaker 2: have experienced a couple of years ago. If we don't

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Speaker 2: do something about that, then yes, you are right, insurance

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Speaker 2: will become a challenge. We've been talking to the government

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Speaker 2: for some time about how do we make sure that

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Speaker 2: we are building better protections, having some hard discussions how

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Speaker 2: do we fund these things. Because we can have reduced

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Speaker 2: the impact of things like floods like we saw a

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Speaker 2: couple of years ago, then we'll be able to keep

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Speaker 2: insurance accessible for New Zealanders.

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Speaker 3: Yeah, did you hear? You might have seen this yesterday.

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Speaker 3: We talked about it on the show. Belinda Story, who

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Speaker 3: does a lot of research. Economists, who does a lot

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Speaker 3: of research around climate risk and stuff, reckons that houses

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Speaker 3: near water or with water views are about thirty to

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Speaker 3: forty percent overpriced. What do you think, Look.

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Speaker 1: I haven't seen that research.

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Speaker 2: I know that where there are areas of higher natural

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Speaker 2: hazard risk like flooding and landslip, that there are going

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Speaker 2: to be some challenges for those communities in the future,

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Speaker 2: and we can actually maintain the value of those houses

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Speaker 2: in some of those areas if we build better protections,

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Speaker 2: and that's the long term challenge for New Zealand. There

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Speaker 2: will be more storms, there will be more floods. You know,

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Speaker 2: we report out a couple of weeks ago said there's

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Speaker 2: going to be thirty percent more rain than in these storms,

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Speaker 2: and we've kind of experienced in the past, so I

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Speaker 2: think most New Zealanders wouldn't want to make.

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Speaker 1: Sure that we're getting ahead of that.

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Speaker 2: So we do agree with consumers in New Zealand's point

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Speaker 2: in their report, it says the central government needs to

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Speaker 2: kind of grip this up a bit. I mean, the

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Speaker 2: banking sector, the insurance sector, councils have been calling for

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Speaker 2: some action around risk reduction for some time, and we

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Speaker 2: spent a hell of a lot of money responding to events,

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Speaker 2: and I think we could do better by making sure

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Speaker 2: we build some protections to reduce the impact. You know,

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Speaker 2: we jumped into the Takapuna golf course and debated a

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Speaker 2: month or so ago because we thought it was the

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Speaker 2: right thing to say. Actually, there's lots of fair and

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Speaker 2: businesses around there that could do with not getting flooded again.

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Speaker 3: Yeah too, right, fav. Thank you for your tom. Always

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Speaker 3: appreciate it. This Chris Faffway, the Insurance Council Chief Executive.

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