New Zealand has spent an estimated $64 billion responding to natural disasters since 2010, with most of that funding directed toward recovery rather than preventative measures, according to analysis commissioned by IAG New Zealand.
The report estimated that the central government allocated $19 billion to disaster response efforts over the past 15 years and disbursed another $14 billion through public insurance mechanisms.
Private insurers accounted for the remaining $31 billion, bringing the total cost of natural hazards to $64 billion – equivalent to $5.5 billion per year in inflation-adjusted terms. Government contributions represent around half of that figure.
IAG New Zealand CEO Amanda Whiting (pictured) said the research highlighted the significant financial burden disasters pose to the economy.
“These costs represent a drag on our economy and work against the growth and financial strength required to support the needs and aspirations of New Zealanders,” she said.
According to the report, 97% of central government spending since 2010 was focused on post-disaster recovery and emergency response.
Major outlays were made in the aftermath of the Canterbury and Kaikoura earthquakes and the North Island weather events of 2023.
Only a small portion – about 3% – was directed toward mitigation and risk reduction strategies.
The true cost is likely higher, as the study does not account for local government expenses or broader economic disruption. For example, Christchurch City Council alone is expected to spend $8.2 billion on recovery linked to recent earthquakes.
Deloitte also suggested that indirect costs, such as social and economic losses, could inflate the overall impact by 50% or more.
Whiting noted that consistent, detailed tracking of disaster-related costs would support better decision-making.
“We need to prioritise improving how the actual costs of natural hazard events are recorded by central and local government, so that we know how much we are spending, on what and where. Alongside this, we must quickly move to understand the underlying trends, regularly model the expected financial impact of natural hazards, set relative benchmarks, and closely monitor changes in risk over time,” she said.
IAG said it continues to invest in data analysis and is working with partners across the public and private sectors to improve resilience planning.
The findings aligned with regional trends outlined in Aon’s Q1 2025 Global Catastrophe Recap. The report indicated that the Asia-Pacific region experienced billions in disaster-related losses during the first quarter of the year, much of which was uninsured.
Aon’s reinsurance solutions CEO for APAC, George Attard, said the region faces growing complexity due to extreme weather and seismic events.
“Extreme weather and seismic events remain a powerful force driving the complexity and volatility that businesses and communities face and emphasises the urgent need for innovative mitigation solutions to address this growing challenge,” he said.
Back in New Zealand, public concern over natural hazards is rising.
Research from IAG brands AMI, State, and NZI found that more than half of survey respondents felt anxious during storms or periods of heavy rain. Flooding was a key concern for 43% of those surveyed, while 50% worried about earthquakes.
In response, more homeowners are taking steps to reduce risk. A survey by Toka Tū Ake – Natural Hazards Commission found that 71% of homeowners had made improvements to their properties to mitigate hazard risks, a 15% rise compared to the previous year.
