Certainty sought on Canterbury risk

17:00, Sep 21 2012

Insurers and investors want more certainty on the extent of the financial risk they may face in Canterbury before they can move forward, seismic engineering experts say.

Impact Project Management director Nick Regos said building owners and insurance companies wanted more certainty on the cost risk they faced in the region.

"There is a lot of fear and misinformation in the marketplace. From an economic perspective there is a lot of fear," Regos said.

Impact Project Management and global earthquake and global structural engineering company Miyamoto International have formed a partnership, called Miyamoto Impact, to work on rebuild projects in Canterbury.

Miyamoto chief executive Kit Miyamoto said the new seismic building standards were confusing for many people and trying to use a "cookbook approach" by aiming for a certain percentage of the new building standards was technically "almost impossible".

Nor did a percentage figure of the building code help investors, he said.

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"You need to look at the building, how much is it going to move, and how much damage is going to occur and convert those into financial cost, a capitalised cost."

That quantitative risk analysis was what investors and insurers needed to move forward, he said. It was a proven method.

"And we know how insurance companies and investors react to it, it is a proven formula, it creates a secure environment and creates a favourable investment environment."

Disasters created investment opportunities, if it was managed correctly, he said.

From his experience in other earthquake disasters around the world, including in the United States, Haiti, Italy and Japan, Miyamoto said small businesses were critical for a region's recovery.

More than 90 per cent of businesses here were small businesses and creating a financially secure environment was extremely important.

BusinessDay.co.nz