Organisations can spend more time preparing for the last crisis than they do for the next one.
Insurance remains one of the most effective tools for managing known risks. However, some of the biggest threats facing businesses today are emerging in ways that are difficult to quantify. Few emerging risks are more relevant to New Zealand businesses than climate change. While extreme weather events often dominate headlines, the broader impacts are creating new risks that can reshape business operations, supply chains and access to insurance long before a claim occurs.
Emerging risks are often characterised by uncertainty and don’t have a clearly defined ‘event’. They develop gradually, lack historical data and can be difficult to assess using traditional risk management techniques. Despite this, they have the potential to fundamentally alter an organisation's operating environment, creating both threats and opportunities.
When climate risk is discussed, attention naturally turns to extreme weather events and the resulting insurance claims. These tend to dominate headlines, which can create a strong bias in decisions made at renewal time. However, the broader implications extend far beyond physical loss. Climate change is increasingly influencing the way smart organisations operate, invest, plan and make strategic decisions.
An emerging risk insurance brokers should watch closely is the growing challenge of affordability and access. As natural hazard losses continue to increase, some locations and industries may face rising premiums, higher retentions or reduced insurer appetite. For many organisations, this becomes a business resilience issue rather than simply an insurance purchasing challenge. The ability to access affordable risk transfer via strong market participation may become an important competitive advantage.
A second emerging risk is supply chain disruption. Severe weather events do not need to occur at a client's premises to create significant impacts. Flooding, wildfire, drought or storm events elsewhere can interrupt the availability of critical materials, equipment and services. Businesses may experience operational disruption, increased costs and delayed projects despite suffering no direct physical
damage themselves.
Emerging risks don’t arrive with complete information or a clear event date; they emerge through a series of weak signals and wider economic or political indicators that can be easy to overlook. Over time, however, these signals can combine to materially change an organisation's risk profile. Many major disruptions seem predictable in hindsight.
For brokers, the challenge is to broaden conversations beyond policy coverage and renewal terms. By helping clients understand how emerging climate-related risks may affect their business over the coming years, brokers can support more informed decision-making and stronger organisational resilience.
Insurance will always remain an important component of risk management. However, the organisations best positioned for a sustainable future will be those that look beyond what can be insured and prepare for the broader impacts of a changing climate.
