Press Release – Earthquake Commission
The Earthquake Commission has concluded its 2013 reinsurance negotiations with full placement of its $3.25 billion cover programme at rates similar to last years.
International reinsurers sign up to EQC
The Earthquake Commission has concluded its 2013 reinsurance negotiations with full placement of its $3.25 billion cover programme at rates similar to last year’s.
The placement, which compares with $2.5 billion in the previous programme, was 10 percent oversubscribed, and has a provision for one reinstatement after an event.
Chief Executive Ian Simpson said the ongoing support of international reinsurers was an essential underpinning of the New Zealand insurance market, particularly given the pressures on EQC’s Natural Disaster Fund as a result of the Canterbury Earthquakes.
“We have ongoing cover sufficient to meet the costs of a significant disaster, although perhaps not at the levels experienced in Canterbury,” Mr Simpson said.
Mr Simpson said reinsurer confidence had been bolstered by the commitment to transparency in its dealing with the markets which had been corroborated by audit reviews of claims and the Canterbury Home Repair Programme by several leading reinsurers.
“In the last couple of years, we have dealt with a number of situations that are entirely unique in insurance history. These include land damage due to liquefaction, and the associated need to undertake extensive geotechnical investigations.
“The requirement to apportion each claim to an event, given that there was a series of very damaging earthquakes in Canterbury, has been frustrating for customers and it has been administratively challenging. But if we had fallen short on these obligations, there could have been a substantial long-term impact on the entire New Zealand insurance market,” Mr Simpson said.
“EQC has received 467,000 claims made up of 736,000 building, land and contents exposures. It’s one of the largest insured events ever, and the fact reinsurers have confidence in EQC is a vote for all of New Zealand,” he said.