New Zealand’s Earthquake Commission (EQC) has announced the successful renewal of its NZ$6.2 billion reinsurance programme for 2020-2021.
The reinsurance will cover disaster events such as earthquakes, tsunamis and volcanic eruptions. This year’s programme is a renewal of the upsized 2019-2020 reinsurance programme.
EQC’s Chief Executive Officer (CEO), Sid Miller, said: “International reinsurers have again shown their ongoing confidence in New Zealand and the Earthquake Commission with this year’s agreement which commenced on 1 June 2020.
“Reinsurance is similar to a large household insurance policy. The difference is that EQC takes out this cover across the whole country, for the more than 90% of New Zealand homes that are covered by EQC through their private insurance policy.”
So far, the EQC’s reinsurance protection has only been used in response to the Canterbury earthquakes, where reinsurers are expected to assume roughly NZ$4.6 billion of the more than $11 billion total that the EQC expects to pay.
“The placement of the reinsurance programme is always a significant milestone for EQC and I am very pleased that we have managed to secure our full programme while managing the global impact of the COVID-19 pandemic on our process and partners.
“EQC’s ongoing investment in natural hazards research and modelling to estimate the financial impact of events all help provide reinsurers with a high level of understanding of the risks that they are underwriting,” said Miller.
In 2018, the EQC bought $5.55 billion of reinsurance protection, and in the previous year it bought $4.83 billion.
“Our reinsurance programme is critical to providing cover to New Zealand homeowners for big events like the Canterbury earthquakes, so we’re very pleased our reinsurers continue to back us,” said Miller.