1. Local Government Risk Agency
Lawrence Yule

2. Local Government Risk Agency - background
Insurance market review
Sector needs to invest in risk management
Create a focus on risk management & mitigation
Manage intellectual property (data)
Utilise collective bargaining power negotiated insurance in the market
Restructure the 60/40 arrangement encouraging layered approach gaining ongoing Crown support
Natural hazards thinkpiece
A strategy
A single information portal
Policy platform

3. Local Government Risk Agency - background
Local government risk management agency governance
Establishment board
External and local government expertise
Treasury observer
Advisory group
Local government expertise: broad in geographic representation and skills.
EQC and DPMC represented.

4. Local Government Risk Agency - background
Single stage business case using the Government’s Better Business Case framework
National Council endorsed in May ( after sector engagement)
Establishment Board provided a final business case to Ministers June 2016

5. LGRA business case – Strategic Case (1)
Local government assets are critical to the economy and community wellbeing
By enabling greater capability and understanding the LGRA will generate two overall benefits:
Greater community resilience and welfare as a result of better risk management and governance
Improved national and local visibility (greater sharing and understanding)
and cost certainty of risk exposure

6. LGRA business case – Strategic Case(2)
Alignment with international direction and research
Sendai Framework for Disaster Risk reduction
Australian Productivity Commission
Paris Declaration
Alignment with other NZ initiatives
Metadata standards project
National geotechnical database project
Three waters infrastructure review
RMA amendments and NPS on natural hazards
National resilience strategy

7. Themes from sector workshops
Support exists for creating an entity to facilitate and provide guidelines and information on good practice
The entity should have an audit or accreditation role linked to assistance to improve practice
Benchmarking practice with other councils is useful

8. Local Government Risk Agency
Survey of Councils covered four key areas
Identifying and understanding risks from natural events
Evaluating specific actions to manage risks – how well are councils managing risks
Risk management - insurance
Opportunity gaps

9. Local Government Risk Agency
Rural and provincial sectors demonstrate more need for the services of a LGRA
General question to all suggest people expect to deal with a moderate event with moderate impact on their community once in every 200 years.
Information sources vary with CRIs and central agencies used the least. The exceptions were tsunami (CRIs) and sea level rise (central agency).
Respondents want better more comprehensive information.
Information that councils hold on natural hazards is publicly available on request.
The metro and regional sectors responded that they have identified the risks posed by natural hazards ‘reasonably thoroughly’

10. Local Government Risk Agency
There is varied risk management practice among local authorities and in some cases it is poor
Approx 25% of respondents do not have a formal risk register or risk management framework. Approximately 50% of rural respondents do not have either one.
30% of the risk registers are not reviewed annually. The risk management frameworks are reviewed even less.
80% of respondents have an Audit and Risk Committee which usually meet once or twice a year. About two-thirds have independent advisors and elected members as part of these committees
About half of respondents do not have a business continuity plan.
Metro and regional councils have greater confidence that risks are being thoroughly managed .

11. Local Government Risk Agency
There are opportunities around risk assessment, best practice and expertise
A significant number of respondents identified continuity planning for disasters, and internal resource (like resources and expertise) as areas that cause difficulty for risk management.
Defining the potential impact of each hazard was considered by respondents to be the most critical aspect of risk management, particularly with rural and provincial councils.
Having an accurate assessment of potential liability and establishing a plan to mitigate each hazard appear to be the weakest areas of risk management performance.

12. LGRA proposed services roadmap

13. LGRA proposed services outputs (Phase 1)
Guidelines and frameworks
The risk and resilience assessment approach
Treatment of risk and improving resilience
Identification and benchmarking of risk and resilience maturity
Information about appropriate risk financing approach
Current state and gap analysis
Identifying, analysing, evaluating risks
Treating risks and improving resilience
A risk and resilience management self assessment tool
Application of the framework and guidance documentation

14. LGRA proposed services outputs (Phase 1)
Data collection and centralised reporting
Standardised approach to data collection and centralised reporting
Potential vehicle to assist in implementation and subsequent reporting from the results of metadata standards project
Loss estimates
Provide a standardised approach for local authorities
Outsourced to appropriate provider
Governance and technical training
Expedite related professional development opportunities for local authorities

15. Risk financing guide for Local Authorities
Risk appetite and risk tolerance
Risk retention and risk transfer
Administrating self insurance
Essential features and principles of insurance
The amount insured and basis of settlement
Valuations for insurance purposes
Dealing with the insurance market
Deductibles and policy layering
Making a claim
Other options for transferring risk

16. Risk framework Model 2: Asset Criticality Assess Risk (raw)
Risk treatment
Residual risk
Avoid – mitigate – transfer – accept: Mitigate may mean reduce L or C or V&R (proactively). Includes other 3 ‘R’s. – which can involve proactive or reactive approaches.
Counter-measures need to be recorded and monitored
Risk that remains after all resilience or risk treatment options are in place L C
V & R
Risk

17. Value of risk management – maturity index

18. Local Government Risk Agency
Questions?