Insurance Australia Group's (ASX:IAG) IAG New Zealand division on Wednesday urged New Zealand's government to develop a long-term roadmap to cut natural hazard risk, which it said is rising faster than the country's ability to manage it.

A new report from IAG has revealed "concerning gaps in how New Zealand plans, builds, invests and governs to reduce the impacts of its earthquakes, floods and cyclones."

The country's current approach is fragmented and poorly coordinated, with councils expected to manage the burden in the absence of necessary tools or funding, while repeated disasters are set erode growth and public finances without further reform, the report found.

It identifies dozens of gaps in New Zealand's approach to risk reduction, including a lack of both consistent rules and reliable hazard and risk information to support decisions.

Disasters have cost New Zealand at least NZ$4.2 billion a year over the past 15 years, but during that time, nearly all the spending has been geared toward response and recovery rather than reducing the impact of hazards, IAG New Zealand said.