Weather, it's enough ...

As New Zealand's largest insurer IAG calls for a systemic response to enable it to provide New Zealanders with insurance for "as long as possible" (let the latter part of that sentence sink in), we highlight a couple of reports we found helpful in seeking to understand the new risks and opportunities that may arise from the impact these increasingly frequent weather events might have on commercial real estate.

"If an asset is not insurable, it is not investable. A property that is insurable today may not be insurable next year"

These new risks, which still appear remote, bring property decisions being made today into sharp focus. Whether those decisions involve due diligence for new acquisitions or strategic reviews of existing properties, the need to understand the ongoing availability of insurance and debt financing are now elevated in the hierarchy of risks to be addressed.

This first report from UNEP in 2021 helps to set the scene. It was commissioned to "help support real estate practitioners and investors in understanding and managing the physical risks from climate change with a specific focus on how these risks affect commercial real estate asset values and prices. Global regulators and market participants are signalling the need for forward-looking climate risk analysis and assessment of asset value impact, and the authors sought to assess the evidence that property markets are, or are not, responding to climate risk through pricing, capex or opex decisions."

UNEP Climate-risk-and-real-estate-value_Aug2021.pdf

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The second report "Preserving property value and managing insurance costs in a changing climate" from JLL, in conjunction with the world's largest insurer Munich Re, recognises "climate change is increasing the frequency and severity of extreme weather events. These rising climate

risks affect loan conditions, drive up insurance losses and premiums, and reduce property values. With the right tools and frameworks, real estate investors, banks, insurers, and municipalities can more accurately assess physical climate risks. Innovative insurance models and climate adaptation measures support financing, maintain insurability, strengthen community resilience, and help preserve property value."

We’re witnessing a fundamental shift in real estate valuation. By 2030, 45% of leading companies will only select climate-resilient buildings. The properties that integrate adaptation measures today will be the blue-chip assets of tomorrow – while those that don’t, risk becoming tomorrow’s stranded assets

JLL Munich RE March 2026 Preserving property value and managing insurance costs in a chang.

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Please contact us if you wish to further explore these risk and opportunities.