Insurance premiums skyrocketing for Wellington businesses
Half of Wellington businesses have faced difficulties purchasing insurance as the city grapples with a rapidly changing insurance market, says Wellington Chamber of Commerce.
"Rising premiums for business and commercial property insurance is putting the strain on local businesses, even affecting some of their operations," says Chief Executive John Milford.
In the Chamber’s latest quarterly business confidence survey, 30 per cent of respondents said they had experienced "significantly increasing premiums" in the past three years.
"The insurance market has changed a lot in the past few years. Wellington has been shaken by several moderate earthquakes, and insurance companies are now moving to so-called ‘risk-based pricing’," says Mr Milford.
"All this has combined to mean higher premiums for Wellingtonians and it is starting to impact on the operations of local businesses.
"We also received feedback from our survey respondents that insurance companies are inserting more exclusion clauses into contracts or they found competition in the market is limited . A few businesses were even denied coverage completely.
"Previously, the Chamber has highlighted the example of a typical commercial office block in Wellington that saw its insurance premiums rise 220 per cent in just four years - from $99,000 in 2016 to almost $320,000 this year.
"These higher premiums for commercial properties flow through into higher rents for tenants. This adds to the cost of doing business at the same time as the council is increasing rates and compliance costs generally are rising.
"The Wellington Mayoral Taskforce on insurance is currently developing recommendations for government action, and we look forward to seeing what they come up with as a matter of urgency."
The survey was conducted over three weeks in September and received over 200 responses from businesses in Wellington’s city and suburbs.