Swiss Re today announced that, based on current information, it provisionally estimates its claims cost from the earthquake in New Zealand to be about $800 million, net of retrocession and before tax. The total insured claims for the insurance sector for the earthquake in New Zealand are estimated to be between $6 billion to $12 billion.
The magnitude 6.3 earthquake which struck the Christchurch region of the South Island of New Zealand on February 22, 2011 caused fatalities and widespread damage, particularly in the city of Christchurch. While smaller in magnitude than the September 2010 earthquake, this event was at a shallower depth and significantly closer to the central business district of Christchurch, New Zealand’s second largest city.
“The latest earthquake in New Zealand took a heavy toll in terms of human fatalities, despite the advanced risk prevention measures that are in place in New Zealand,” says Stefan Lippe, Chief Executive Officer of Swiss Re. "The purpose of insurance and reinsurance is to help individuals and communities cope with the devastating impact of such events. Our role is to enable the people of Christchurch to recover swiftly from this catastrophe.”
Take up rates for earthquake insurance are high in New Zealand. Residential properties are insured by the government run Earthquake Commission scheme (EQC) up to NZD 100,000 per building policy and NZD 20,000 per contents policy. Householders can purchase private insurance above the NZD 120,000 cover provided by the Earthquake Commission. Commercial and industrial risks are insured by local and global insurance companies.
Swiss Re’s preliminary estimates suggest the total insured loss for the insurance industry for the latest earthquake in New Zealand will be in the range of $6 billion and $12 billion, making this a significant event on a worldwide basis.