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Australian Insurers Say Exposure To New Zealand Quake Still Too Early To Tell
Australian insurers with exposure to the earthquake in New Zealand say it is still far too early to tell the extent of their liability to the disaster, as the calculation of costs relating to the damage caused have yet to be totalled.
Insurance Australia Group (IAG) says it has received and responded to more than 2000 calls from its customers in the aftermath of the natural disaster.
IAG says that its exposure to the 7.1 magnitude quake which rocked the city of Christchurch on Saturday will be entirely absorbed through reinsurance contracts the company undertook.
“Subject to the damage caused by the Christchurch earthquake, the loss from a subsequent major event this calendar year would be capped at a maximum of $175 million,” the company said.
IAG chief executive Officer Michael Wilkins said: “At this stage, it is too early to determine the extent of damage to our customers’ property, however we expect it is likely to be significant.”
Suncorp-Metway says its financial exposure to the Christchurch earthquake will be limited.
“While it will be some time before an accurate assessment of claims volumes and costs can be provided, Suncorp’s financial exposure is likely to be limited due to New Zealand’s statutory framework and the group’s conservative reinsurance arrangements,” said Suncorp, which operates the Vero New Zealand and AA Insurance groups in New Zealand.
Suncorp points out that the New Zealand government through the New Zealand Earthquake commission provides the first level of household cover should the country be hit by such a disaster, with cover for each house capped at NZ$100,000 per property, and a further NZ$ 20,000 for contents.
“Any household exposures beyond this and Suncorp’s commercial property risks are supported by the group’s reinsurance arrangements, which include a cap of $NZ60 million on its Vero NZ and AAI domestic earthquake exposures,” Suncorp said.
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