Regional Council Workshop
Date: 31 July 2024
Time: 12.30pm
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Venue: |
Council Chamber Hawke's Bay Regional Council 159 Dalton Street NAPIER |
Agenda
Item Title Page
1. Welcome/Karakia/Apologies
2. Council's insurance 3
2.30pm
3. Heretaunga Plains and Upper Tukituki Cyclone Gabrielle scheme reviews 5
Council and Risk & Audit Committee Workshop
31 July 2024
Subject: Council's insurance
Reason for report
1. This item introduces the workshop about the current insurance industry market across New Zealand including a deep dive into various material policies that HBRC currently holds to manage financial risks.
Executive summary
2. HBRC has, to date, had reasonable comfort with the ability to obtain insurance in offshore markets and has received cover requested. HBRC pays $1,365k (2023-2024) per annum for insurance. This has increased from $1,099k in 2022-2023 and $979k in 2022-2021.
3. AON, our Insurance Brokers will provide a presentation on the New Zealand (and global) insurance market and assist with providing responses to Industry norms and comparatives to current Insurance held by HBRC.
Background
4. Having insurance (or not) is a risk appetite decision and something that requires ongoing assessment. It is put in place to minimise the financial implications of adverse events.
5. Over the last 12 months, insurers in NZ (through offshore global reinsurers) have indicated the unease of reinsurers to provide cover to specific industries, and global protection gaps caused by the combination of climate change, cyber threats and social and demographic changes are being seen.
6. In July 2024, Marsh declined to continue providing insurance for Professional Indemnity/Public Liability and this was helpfully picked up by AON.
7. Self Insurance/captives are common programmes of work progressing across the industry to mitigate rising premiums, however, establishment of these and maintaining appropriate portfolios of liquid cash to mitigate risks in the short term is a further risk to consider.
8. Hawke's Bay Regional Council was previously a member of the New Zealand Mutual Liability Riskpool scheme (Riskpool). The Scheme is winding down, however the Council has an ongoing obligation to contribute to the scheme should a call be made in respect of any historical claims (to the extent those claims are not covered by reinsurance) and to fund the ongoing operation of the scheme.
9. The likelihood of any call-in for historical claims diminishes with each year as limitation periods expire. However, as a result of the Supreme Court decision on 1 August 2023 in Napier City Council v Local Government Mutual Funds Trustee Limited, it has been clarified that Riskpool has a liability for that member’s claim in relation to non-weathertight defects (in a mixed claim involving both weathertight and non-weathertight defects). Riskpool has advised that it is working through the implications of the Supreme Court decision. At this point any potential liability is unable to be quantified.
Discussion
10. AON will provide a verbal update and presentation at the workshop.
11. HBRC staff will provide detail on material policies held including:
11.1. Material Damage/ Business Interruption
11.2. Infrastructure
11.3. Public Liability (also called General Liability) & Professional Indemnity
11.4. Harbour Masters
11.5. Commercial Motor Vehicle
11.6. Contract Works
11.7. Cyber – discussion only. [No cover currently held]
Next steps
12. A large number of current insurance policies will renew in October 2024, and any proposed changes will be requested then.
Authored by:
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Jess Bennett Programme Finance & Controls Manager |
Tracey O'Shaughnessy Treasury & Investments Accountant |
Approved by:
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Susie Young Group Manager Corporate Services |
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Regional Council Workshop
31 July 2024
Subject: Heretaunga Plains and Upper Tukituki Cyclone Gabrielle scheme reviews
Reason for report
1. This report introduces the presentation to provide status updates for the Heretaunga Plains Flood Control Scheme and the Upper Tukituki Flood Control Scheme reviews undertaken by Tonkin + Taylor.
Executive summary
2. This item introduces the presentation of the Heretaunga Plains Flood Control Scheme and Upper Tukituki Flood Control Scheme reviews which:
2.1. evaluate the Level of Service (LOS) of the schemes
2.2. evaluate the performance of the schemes during Cyclone Gabrielle
2.3. provide key findings from the modelling
2.4. present options to improve resilience against over design events.
Background
3. Following Cyclone Gabrielle Tonkin + Taylor was engaged to undertake the scheme reviews of the Heretaunga Plains Flood Control Scheme and the Upper Tukituki Flood Control Scheme.
4. The key objectives of the reviews included:
4.1. evaluation of the performance of the schemes during Cyclone Gabrielle
4.2. evaluation of the appropriate LOS for the schemes
4.3. development of options to improve resilience against over design events.
Discussion
5. The presentation will provide a status update on the progress of each of the scheme reviews as well as a high-level communications and engagement plan for feedback.
Next Steps
6. The team will progress with modelling the options.
7. The consultation and engagement plan will be further developed.
Authored by:
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Jonathan Smith Senior Design Engineer |
James Feary Operational Response Manager |
Approved by:
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Chris Dolley Group Manager Asset Management |
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Attachment/s There are no attachments for this report.