Investment managers appointed to strengthen Natural Hazards Fund
The Natural Hazards Commission Toka Tū Ake (NHC) has appointed three investment managers to deliver the next stage of its new diversified investment strategy for the Natural Hazard Fund (the Fund).
The appointments are a significant milestone in implementing NHC's Statement of Investment Policy and Objectives (SIPO), which sets out how the Fund will be managed and invested to ensure NHC is better prepared to meet the cost of future natural hazards.
NHC Chief Financial Officer Chris Chainey says the appointments are an important step in strengthening the long-term resilience of the Fund.
"The Natural Hazards Fund is a cornerstone of New Zealand's ability to recover from natural hazards. By broadening how the Fund is invested, we're strengthening its ability to support homeowners over the long term."
Every insured homeowner across New Zealand pays an annual levy for the natural hazards scheme as part of their home insurance premium. The money goes into the Fund, which is managed by NHC and used to settle insurance claims for natural hazards damage. The current balance of the Fund is around $887 million.
"Earlier this year we announced a new investment direction for the Fund. These appointments turn that strategy into action, bringing on specialist investment managers with the expertise to help deliver our long-term objectives to improve the financial resilience of NHC while maintaining a prudent approach to risk."
The appointed investment managers for the respective asset classes are:
- Listed Equities - Mercer NZ Limited
- Cash - Fisher Funds Management Limited
- Other Fixed Interest - Amova Asset Management New Zealand Limited
The appointments follow a competitive procurement process that attracted strong interest from leading investment managers across New Zealand and internationally.
"The amount of interest we received demonstrates confidence in both the Fund and our long-term investment direction," says Chainey.
"We were pleased with the calibre of responses throughout the process. It gave us confidence that we've selected investment managers with the capability, governance and investment expertise to support the Fund's long-term success."
The diversified investment strategy is designed to strengthen the long-term sustainability of the Fund, helping it grow over time while ensuring it remains well placed to meet future natural hazard claims. It also supports NHC's objective of reducing reliance on the Crown Guarantee over time.
After the Fund was depleted by the Canterbury and Kaikōura earthquakes, NHC has taken a deliberately conservative approach to rebuilding and managing it in recent years, primarily through cash and short-term bank deposits. The new investment approach broadens the Fund across a wider range of asset classes, supporting sustainable growth, while continuing to manage risk carefully.
The Natural Hazards Fund helps meet the cost of claims made under Natural Hazards Cover and is a key part of New Zealand's financial resilience to natural hazard events.
