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Insurance Risk Highlighted For West Coast
The West Coast Regional Council will need to assure the insurance sector its flood protection assets are a good bet -- especially in light of climate change.
In April, council's auditor issued a qualification on the council's draft 2024-34 Long Term Plan consultation document around how it intended to address climate change in the service level of its flood protection assets.
The matter impacting the bigger picture of insurability for the West Coast as a region was canvassed again this week by councillors at their Audit and Risk Committee.
As it considered a quarterly report on service measure targets for planning, committee chair Frank Dooley said the target measure for an unqualified audit opinion on the LTP had to be questioned, "when you see the comments we received from the auditor around climate change".
Acting corporate services manager Aaron Prendergast said while it had been raised by the auditor in relation to the LTP there was no way to demonstrate an assurance at present that council's planning strategy can incorporate climate change.
Cr Dooley said the only way council might deal with it was when it undertook a full assessment of the condition of all the river and coastal protection works on its books -- namely stop banks.
"As we work through 2024 we should be able to deal with that."
Further on in proceedings, chief executive Darryl Lew noted the insurance question was heightened, following the natural events impacting the North Island a year ago.
It would be more acute as council moved to advance its flood resilience building across the region, particularly for Westport.
"It's becoming clearer that insurance is heading to a much more risk based approach," Mr Lew said.
"That drives prices, and that drives if banks will even lend."
When it came to council's "core role" in administering flood schemes, then it would need to be able to demonstrate to insurers, valuers and the banks, "that our flood schemes are to standard," he said.
This was especially important for Westport as work on its scheme evolved.
"Then that is good for property owners and the Coast, and it's actually good for this council in terms of rating."
Mr Lew said it had a "broad global connection" to the viability of the West Coast economy in the end.
Cr Dooley said mitigating the local insurance environment would partly come back to council commissioning it planned independent review on the integrity of its flood schemes across the region.
"This is what will drive our relationship with the insurance sector. That will assist all of our ratepayers to get insurance, and at reasonable levels," he said.
In light of the events at Westport since July 2021, it was a major challenge now for property owners.
"You only have to mention Westport at the moment and they (insurers) run a mile."
Cr Dooley thanked staff for current work behind the scenes to address standards for council's flood schemes.
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