New Zealand – second in the world for natural disaster costs

New Zealand’s a risky place. New Zealand ranked high risk for just about every natural disaster The Global Facility for Disaster Reduction and Recovery could think of: earthquakes, tsunamis, volcanoes, floods, landslides and cyclones - though not extreme heat or water scarcity.

The Global Facility for Disaster Reduction and Recovery looks at the risks posed by natural disasters. Users can use their online tool, ThinkHazard, to look at the overall risk factors for countries, regions or even cities.

New Zealand is ranked as the second riskiest country in the world when it comes to natural disasters, according to Lloyds’s of London study: “A World at risk: Closing the insurance gap”. We sit only behind flood-prone Bangladesh.

Chile, also prone to earthquakes, ranks third followed by China, Vietnam, Indonesia, Thailand, Turkey, Philippines and Japan.

Lloyd’s insurance risk index report, which ranks 43 countries on their expected loss from natural disasters, estimates an annual expected cost for natural disaster damage. They look at the probability of a natural disaster happening and multiply that by the cost to property.

The expected annual cost for New Zealand, for example, is 0.66 per cent of the country's GDP, compared to 0.83 per cent for Bangladesh and 0.65 per cent for Chile.

New Zealand is continuously faced with extreme weather events. "After the Christchurch earthquake of 2011, which caused damage equivalent to 14 per cent of the country's GDP, the country has suffered from further seismic events and several significant floods”, the report added.

However, insurance coverage has fallen since the Christchurch earthquakes of 2011. “After an initial flurry of insurance uptake in the wake of the Canterbury earthquakes, appetite for these products has slowed in recent years.”

The report demonstrates that New Zealanders understand the value of insurance, and just how vulnerable New Zealand is to natural disasters, but relatively high insurance penetration rates doesn’t necessarily mean all assets are sufficiently well covered.

After the Canterbury earthquakes, changes to home insurance policies from "total replacement" to "sum insured" has meant the onus is on homeowners to estimate the cost of replacing their home.

Perhaps people are under-estimating the cost to replace their assets, which could leave them vulnerable.

“New research has revealed New Zealanders have higher expectations of their buildings in earthquake events than providing life safety alone.

“New Zealanders don’t just want to escape a major earthquake with their lives, but they want to be back living and working in those buildings soon after an earthquake,” explains Helen Ferner from the New Zealand Society for Earthquake Engineers (NZSEE).

NZSEE and the EQC Toka Tu Ake have published the results of the three-year Resilient Buildings Project, which captures the expectations we have of our buildings, and provides a policy framework tool to support engineers and designers to align with these expectations.

“Our approach to design of new building continues to evolve, and needs to reflect society’s desires and tolerance to the risk of damage, while also considering the costs of mitigation,” Ferner says.

She explains that unprecedented seismic activity in New Zealand has demonstrated the shortcomings in seismic performance in buildings, which resulted in the Christchurch CBD being cordoned off for two years, and thousands of buildings being demolished and rebuilt.

“Those events highlighted that as well as the direct property costs, there was also significant indirect costs from social distress and economic disruption,” Ferner says.

“This framework will support people to create more resilient buildings without blowing the budget, while also meeting people’s expectations.”

EQC chief resilience and research officer Dr Jo Horrocks says one of the key objectives of the EQC is to promote stronger homes on better land.

“From what New Zealanders have experienced in the past decade, more focus on preventing or minimising seismic damage to buildings makes good economic and social sense,” Dr Horrocks says.

Ferner says a major American study quantified major benefit from greater building resilience by reducing casualties and damage, but also minimising the loss of function, social distress, and economic disruption to help the speed of recovery.

The same research also found that the cost of increasing seismic resilience in new buildings was very low — in most cases less than 1% of the construction cost — by using new innovations, but also by avoiding fragile designs and focusing on simpler, regular building designs.

The Resilient Buildings Research discovered that New Zealanders have particularly high expectations of hospitals, marae, aged care facilities and community centres.

“This non-prescriptive framework will help designers to link traditional building performance indicators to wider social, economic and environmental outcomes,” Ferner says.

She argues that the research clearly shows that seismically resilient buildings are no longer a choice or a luxury, but a moral imperative.

“Judging by the enormous trauma suffered in New Zealand, the project team believes the size of the prize, the potential to avoid property loss and associated social distress and economic disruptions, creates a moral imperative to intervene.

How stable and durable is a stick build home ? or a Weetbix home (SIP walls) vs a solid concrete home? I mean, they build skyscrapers out of concrete and long spanning bridges… so they must know something …right?

The combination of concrete and reinforcing is an age-old tested system for seismic events/ cyclones/ tornados and even watertightness as demonstrated by all of the Dams constructed. It’s a no brainer for our family to live in a concrete built home.

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