Perspective

Resolving New Zealand Earthquake Claims Complexity

January 01, 2014| Von Mo Tooker | Property | English

Region: New Zealand

The global insurance market is closely watching the progress of earthquake claims settlements in  New Zealand. Not only does New Zealand enjoy one of the highest insurance penetration rates in the world (over 6%), earthquake sublimits are rarely employed.

Between September 2010 and June 2011 the Christchurch area of New Zealand was hit by a series of earthquakes that caused extensive property and infrastructure damage. The September 2010 quake, magnitude 7.0, was followed in February 2011 by a magnitude 6.1 event; then in June 2011, a magnitude 6.3 quake followed.

The accumulated total insured loss for the events is estimated at NZ$15B in the private sector and NZ$12B through the Earthquake Commission (EQC), the government-backed insurer that provides natural disaster insurance for homeowners.

By the end of September 2013 the insurance industry had paid 41% of domestic claims and 68% of commercial claims. To date, Gen Re has paid 26% of incurred claims. No items are in dispute and this is money that Gen Re owes to insurers operating in New Zealand.

The pace of insureds receiving claims payments is still heavily determined by the complexity of the situation on the ground. Big issues include the number of earthquake occurrences, the remediation of land and the respective roles of private insurance companies and the EQC.

If the ultimate insureds are to benefit from a quicker claims paying process, all of these issues hindering claims settlement must be revisited. Incremental improvements are unlikely to be enough.

 

Meistgelesen

Stay Up to Date. Subscribe Today.

Autoren

Lernen Sie unsere Experten kennen

View Contributors