Continued aftershocks in Christchurch could have long term effects on the insurability of New Zealand


Media release

Christchurch insurance rebuilds $NZ10 billion and rising

15 June 2011

The Insurance Council is warning that the continued aftershocks in Christchurch could have long term effects on the insurability of New Zealand.

The insurance industry has indicated that the continued aftershocks in Canterbury are being viewed with increasing concern by reinsurers and international insurers. The aftershocks raise the level of risk seen in New Zealand and may have a significant impact on insurance and reinsurance policies in the future.

The impact may see increases in premiums and excesses, or even a questioning of the level of insurability for earthquakes that New Zealand receives.

The insurance industry stands firmly behind the people of Canterbury and is currently mustering all resources to cope with the increased and additional influx of claims being received as a result of Monday’s additional earthquakes.

The insurance industry says that many buildings already under repair were again destroyed by the aftershock and this will require a further approach by insurers through their builders to the insured parties, to ensure that buildings are repaired. But earthquake protection will now be set internationally. New Zealand’s earthquake insurance future will be decided by reinsurers’ in boardrooms on the other side of the world.

The insurance industry is now gearing up and expects to pay at least $NZ10 billion into the Canterbury economy and the rebuilding of Canterbury and Christchurch generally. However, over a hundred extra commercial buildings were destroyed in the latest quakes and costs will rise.

The Insurance Council members express their empathy with the people of Christchurch and assure them that the insurance industry will stand behind them to rebuild the community better and brighter than it has ever been.

A number of insurance offices were closed briefly to allow staff to return home to comfort family and children affected by the aftershocks and the industry has indicated that the impact on its staff, like the rest of the Canterbury community, has been profound in a psychological level.

The insurance industry however, says that the future is now being re-assessed by reinsurers and insurers and there are likely to be long term and significant changes to insurance in New Zealand when it comes to the writing of policies and covering of risks like earthquake.

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