New Zealand’s Natural Hazards Commission Toka Tū Ake (NHC), formerly known as New Zealand’s Earthquake Commission (EQC), took advantage of attractive reinsurance buying conditions at its 2026 renewal to lift the top of its reinsurance tower by 20% to $12.3 billion.
That’s around $2.1 billion of additional reinsurance limit secured at the renewals, which the New Zealand Natural Hazards Commission has said is a record size and was secured with efficient pricing.
The organisation has been building up disaster reinsurance protection for risks in New Zealand in recent years and said the growth in the tower at the 2026 renewal reflects global reinsurance market confidence in the country’s natural hazards insurance scheme.
The Natural Hazards Commission’s reinsurance limit provided a nearly $7 billion reinsurance tower in 2021, which grew to $7.2 billion for 2022, then grew again to $8.2 billion for 2023, rose to $9.2 billion in 2024, then expanded further to a reported $10.3 billion at the 2025 reinsurance renewal last year.
With reinsurance market conditions particularly conducive for buyers to increase the amount of limit they renew, it seems the New Zealand Natural Hazards Commission has capitalised on that to grow its reinsurance tower by an even bigger margin this year.
The NZ NHC reports that it has renewed a $12.3 billion reinsurance tower for the coming year, a roughly $2 billion or nearly 20% increase over 2025.
Last year’s renewal attached at $2.2 billion of losses, with claims for events below that level covered by levies collected from insured homeowners as part of their policy costs. This year the NHC has not reported what level of claims the reinsurance attaches at, but it’s likely to be similar given market conditions.
The NZ NHC has cited the improved market conditions for reinsurance buyers, saying that the renewal of $12.3 billion of reinsurance limit was secured “on a more cost-effective basis” compared to last year’s smaller tower.
As we’ve previously explained, it’s typical for a number of insurance-linked securities (ILS) funds to participate in the NZ NHC renewal, taking a share of the reinsurance program on a fronted basis.
We understand from sources that ILS capital participation has increased over the years, but again this is largely collateralized ILS funds or investors that can transact reinsurance with a cedant via a rated fronting entity.
Also recall that, the NHC made its debut in the catastrophe bond market back in 2023 and that NZ $225 million Totara Re Pte. Ltd. (Series 2023-1) catastrophe bond is still in-force and part of the reinsurance tower this year, with its maturity due in early June 2027.
The fact the New Zealand NHC has not returned for additional catastrophe bond coverage yet likely speaks to the attraction global reinsurance players have for perils that add an element of geographic diversification to their portfolios, which we suspect makes pricing and demand very competitive for this program at the renewals. It will be interesting to see if the cat bond is renewed nearer its maturity date.
NHC Chief Executive Tina Mitchell commented on the renewal, “Securing increased reinsurance cover means New Zealand is better placed to respond financially when a major natural hazard event occurs,” says Tina.
“It provides confidence that funding will be available to help pay claims and support recovery, while helping protect the Crown’s balance sheet.
“International reinsurers have choices about where they put their capital at risk. Their willingness to increase their support for NHC reflects the strength of our scheme, the quality of our natural hazard science and modelling, our ongoing investment in resilience and the transparency of our long-standing engagement with reinsurers.
“This continued support from global reinsurers is an important part of the financial protection available for New Zealanders.
“This programme provides peace of mind that New Zealand will have access to the funding needed to recover from major natural hazard events and support affected communities when they need it most.”
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