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The value of the price signal

Grant Robertson appears to be worried that insurers are sending price signals about earthquake zones and flood risks, but I think he has that all wrong: properly pricing these risks encourages development in other places, reduces the cost to taxpayers in emergencies, and also helps people make better choices to mitigate climate change. Prices in general, and insurance in particular have a role to play in changing behaviour. In truth, I think this government knows that - otherwise they wouldn't tax cigarettes and petrol so much.


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