New Zealand’s Earthquake Commission (EQC) has secured a record level of reinsurance of $7.2bn on the international market, an increase of nearly $470m.
Building on the successful renewal of the previous year, it means that EQC has grown its programme by $1.2bn over the past two years to support New Zealand homeowners to get access to affordable home insurance.
Tina Mitchell, CEO of the EQC, said: “We are grateful for the ongoing support of our long-standing reinsurance partners, particularly as the reinsurance markets have hardened significantly over the past few months. We are extremely pleased to be able to secure this level of reinsurance for New Zealand homeowners.”
Mitchell says that the international reinsurance market has hardened in response to considerable losses over the past five years from catastrophic flood, storms and wildfire events, and is also dealing with additional global pressures through the Covid pandemic and the war in Ukraine.
She added: “In our discussions with the reinsurance companies, it became clear that all these factors have impacted their appetite for providing property insurance for natural disasters. The EQC model is unique in the world and, even in those challenging conditions, it continues to be well supported by global insurers.”
While the Government will double the EQC cap from $150,000 to $300,000 on October 1, Mitchell explains that this did not mean that its reinsurance also had to double.
“The large majority of expected EQC claims sits within the original cap, so any increase will support the anticipated small number of homes that suffer damage above $150,000.”
Mitchell says that EQC will continue to look for opportunities to grow the reinsurance programme where this represents good value for homeowners.
