Loss estimates for the New Zealand earthquake earlier this year have been rising steadily as more and more claims get filed. Only a couple of months ago the loss estimates were for an industry loss of around $3 billion, to which some said that certain industry-loss warranty (ILW) contracts would be triggered.
Flagstone Re are the latest major re/insurer to come forward and up its loss estimate. They now estimate that their own losses from the earthquake could be as much as $75.5m, up from an earlier estimate of $52.5m.
They say that an updated industry loss estimate is for a figure of between $4.5 billion and $6 billion. It seems likely, given the increases in re/insurer loss estimates, that the final figure will be nearer to top end of that range. We could well see some New Zealand earthquake risk involved in catastrophe bond transactions as a result of this next year.