Insurance Council of New Zealand (ICNZ) says it helps publish insurers’ risk assessment studies and provides an important signal for all stakeholders to move towards a low-carbon economy.

ICNZ CEO Tim Grafton made the remarks at an online panel hosted by Corelzic titled “Climate Change: Tackling Climate Risk in Financial Services and Insurance.”

“Insurance plays a key role in being able to deliver that value in communicating those risk-reducing investment decisions … to ensure that capital is well allocated so that we can transition to a low-carbon economy by sending the right signals,” said Mr Grafton.

“As soon as we start hiding these – if we see for example that coal is not a long-term problem for investment – we will go into a dark hole.”

In September, New Zealand became the first country for financial institutions to pass legislation to declare their climate-related risks. Financial institutions will now be expected to adhere to a structure of the Task Force on Climate Financial Disclosure (TCFD).

New Zealand has also established a zero carbon law for zero carbon by 2050. Mr Grafton said the government, the Reserve Bank and international insurance prudent regulators now have climate change as a strategic priority.