Risk-based pricing and the availability question
Treasury has tied the industry’s move toward greater risk-based pricing for hazards such as flooding to higher premiums for affected properties, and warned that cover may become unavailable for some properties at any price as hazard models are updated. Tower has framed its model in those terms: “Premiums are calculated based on the flood, earthquake, sea surge, and landslide risk Tower sees at that particular property, not someone else’s,” chief executive Paul Johnston said. In January 2026, Cabinet directed the Council of Financial Regulators (CoFR) – the RBNZ, the Financial Markets Authority (FMA), the Commerce Commission, the Ministry of Business, Innovation and Employment (MBIE), and Treasury – to run a six-month review of pricing and affordability, reporting mid-2026, and paused a proposed increase in the natural hazards levy while it does so.