New Zealand’s Earthquake Commission (EQC) has renewed its NZ$6.2bn ($4.0bn) reinsurance programme for the forthcoming year, with the cover provided by the Aon-placed programme unchanged from last year.
The cover commenced on 1 June 2020.
EQC’s CEO Sid Miller commented the placement shows international reinsurers “have again shown their ongoing confidence in New Zealand and the Earthquake Commission”.
Miller added: “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 did not give any further details of the programme. Last year’s policy had an excess of NZ$$1.75bn, unchanged from the 2018/2019 programme, below which claims would have been paid by the Natural Disaster Fund, which is currently being rebuilt through levies on EQC cover.
In the past, EQC had also provided details on the cost of the programme. For example, for the 2018/2019 programme two years ago EQC’s reinsurance premium for 2018/19 was NZ$179mn.
More than 90 percent of New Zealand homes are covered by EQC through their private insurance policy.
EQC has purchased reinsurance from international markets since 1988. Its reinsurance has been used once, in relation to the 2010/2011 Canterbury earthquakes where reinsurers are expected to contribute around NZ$4.6bn of the more than NZ$11bn that EQC expects to pay out to homeowners when all claims are settled.
“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,” Miller said.