Blair Turnbull: Tower CEO on not letting a big disaster go to waste

<p>Following the spate of extreme, damaging and costly weather events in the North Island this year we shouldn't let a big disaster go to waste, Tower Insurance CEO Blair Turnbull argues.</p><p>Speaking in the latest episode of the <a href="https://www.interest.co.nz/of-interest-podcasts" target="_blank"><i><strong>Of Interest podcast</strong></i></a><i>,</i> Turnbull says the realisation from frequent and extreme weather such as the Auckland anniversary floods and Cyclone Gabrielle is that we are seeing climate change, and we need to understand it better and adapt.</p><p>"We're starting to rethink how to respond to some of these flood events. One thing's very clear, Mother Nature always wins. So we can't just sit there and try and pipe away this excess water, we have to think differently," Turnbull says.</p><p>Auckland Council's <a href="https://ourauckland.aucklandcouncil.govt.nz/news/2023/05/mayor-supports-making-space-for-water/#:~:text=The%20'Making%20Space%20for%20Water'%20programme%20proposes%20nine%20initiatives%3A,and%20property%20acquisition%20and%20removal." target="_blank"><strong>Making Space for Water</strong></a> programme to help manage floods is "quite innovative," he adds.</p><p>Turnbull says the spate of extreme weather events is changing the way reinsurers, who provide insurance for insurers, look at New Zealand, which will lead to further price rises.</p><p>"This has been a bit of a surprise to some of them [reinsurers]," Turnbull says.</p><p>Parametric insurance and risk based pricing are two ways Tower's responding to potentially higher reinsurance costs.</p><p>Parametric insurance is a type of insurance contract that insures a policyholder against the occurrence of a specific event by paying a set amount based on the magnitude of the event, as opposed to the magnitude of the losses in a traditional indemnity policy.</p><p>Turnbull says a parametric insurance pilot in Fiji has gone well, with Tower set to also start offering it in Samoa and Tonga and likely NZ to.</p><p>"We do think it [par