Quake claims top $30 billion

MARTA STEEMAN
Last updated 14:07 09/05/2012

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Canterbury earthquake claims have climbed to more than $30 billion, the Reserve Bank says in its latest financial stability report.

The central bank said that figure was based on estimates from insurers and it was higher than six months ago.

But there was a lot of uncertainty still about the estimates.

So far, insurers had paid out $7.6b in claims - comprising $4.6b from private insurers and $3b from the Earthquake Commission.

Premiums had risen by more than 35 per cent, due to a combination of insurers increasing their charges and a tripling of the EQC levy in February this year to 15c in every $100 of cover.

Further increases in premiums were likely after insurers completed their negotiations with international reinsurers for reinsurance renewals from July.

Since its previous stability report in November last year, more insurers had needed capital injections from their parents, the central bank said.

Some insurers were exiting New Zealand.

One was heritage, churches and community buildings insurer Ansvar, since renamed ACS (NZ). Zurich has stopped offering earthquake cover south of Waikato.

Ansvar told The Press newspaper a month ago its parent had provided $80 million in capital.

The Reserve Bank said also a couple of minor insurers had indicated a desire to exit.

A review of EQC was underway which might affect how insurance cover in the future is provided for natural disasters.

While there was some repair and rebuilding happening in Canterbury, the amount was low due to delays caused by aftershocks, in particular the 5.9 magnitude aftershock on December 23, limited insurance available for new buildings and updates to building codes and other requirements.

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