This paper provides a high-level view of insurance for public assets and the main changes after 2010. It does not provide a comprehensive view of all types of insurance in the public sector. I hope that it will inform debate, and that public entities and others will find it helpful when considering insurance as part of risk management.
The Canterbury earthquakes have resulted in significant costs to New Zealand as a whole. Some of these costs relate to uninsured losses for assets in Canterbury and some relate to unanticipated costs that arise as a result of a major catastrophe. Further, many public entities throughout New Zealand have told me that one of their most significant cost pressures since the Canterbury earthquakes has been insurance.
The cost of the Canterbury earthquakes highlights the importance of good risk management, and the part insurance plays, for public assets. In many instances, public entities can provide services in the future only through the continuing use of their assets. Public entities have had to think carefully about how they are managing their risks and how they are using insurance.
In this context, I decided to find out more about the nature and extent of insurance cover for public assets and the extent of changes in insurance associated with those assets after 2010.
Lyn Provost
Controller and Auditor-General
19 June 2013