Lloyd's insurance could back big Chch projects
Lloyd's insurance syndicates could provide crucial backing for some of the bigger Christchurch earthquake rebuild projects, a London-based insurance broker says.
Ropner Insurance Services managing director Alan Rixon said he had been involved in talks surrounding the rebuild of central Christchurch during his fourth trip to the quake-damaged city.
As an independent Lloyd's of London insurance broker, he had been approached by a group wanting cover for a central city project.
He was working with Christchurch-based loss adjustor and insurance adviser Peter MacLeod to keep in contact with rebuild insurance opportunities.
Lloyd's insurance could potentially become involved in the big blueprint projects such as the convention centre or retail precinct, though the pair did not want to be specific on which projects.
"We've been asked by an Australian broker to be part of a tendering panel for some large insurance needs [for rebuild projects] . . . So they will be very big numbers," MacLeod said.
Rixon and others in the insurance industry would be important for the reconstruction effort.
"We're waiting for the big rebuild to start. Alan's services will be required when you're talking $50 million [for a project] in Cathedral Square," MacLeod said.
Lloyd's syndicates entered the New Zealand market when they saw opportunities after the earthquakes which ended in traditional insurers pulling back, Rixon said.
Given that traditional insurers such as IAG's State and NZI, as well as Vero, were re-entering the market, he was advising Lloyd's syndicates to "probably sharpen their pencils" on insurance for rebuilds.
Initially after the quakes, with a lack of available insurance, the "innovative" London market and Lloyd's had been able to offer cover at a higher price, he said.
Lloyd's and other European insurers such as Royal & SunAlliance group were able to give both "contract works insurance" for construction and then continued cover for the completed building.
Now the Lloyd's syndicates were facing some competition, Rixon said. But there were still opportunities, not only in Canterbury but in the North Island, where there were concerns from insurers not to be too exposed to earthquake risk, particularly around Wellington - a market spooked by the Canterbury quakes.
For example, when insurance on a $100 million North Island building rolled over, often the existing insurer wanted to renew only 60 per cent of the cover. A Lloyd's syndicate could then step in with the other 40 per cent, Rixon said.
"Obviously [insurers] have all had a look now at their exposure in Wellington, and they've got too much . . . we're being asked invariably now to help out with placing some extra capacity in London."
MacLeod said some European insurers were still at the point they would not insure property south of Hamilton, while other insurers, including China Taiping, were pulling out of the New Zealand market completely.
"So the [New Zealand] brokers are ringing us up saying: ‘China won't renew on this property, can you help us out?'," McLeod said.
In Christchurch, Rixon has arranged crucial cover for well-known car dealer and property developer Paul Kelly on a Moorhouse Ave project, as well as the Latimer Lodge in Latimer Square for a $20m rebuild.
North of Wellington and in Wairarapa, he had arranged cover for old pubs in towns such as Greytown, Featherston and Foxton, as well as an Auckland resort.
- © Fairfax NZ News