Insurance agencies have the flexibility to adapt to climate change

​Insurance agencies have a lot more flexibility than banks (or councils) when it comes to adapting to climate change. That's because they can adjust their products on an annual basis to manage risks that increase over time. In contrast, when a bank agrees to a mortgage they're generally in it for the long haul.

The stocktake report (page 71) states: "To reduce some of this exposure, insurance is a requirement for residential mortgages in New Zealand, and failing to maintain insurance can trigger default. However, there is a general absence of compliance checks and lack of understanding of how well properties are insured. These leave a risk that many homes may be underinsured which increases banks' exposure to losses."