new zealand

A magnitude 7.8 earthquake struck New Zealand on Sunday, late at night local time, causing a tsunami warning and was followed by a number of major aftershocks. The earthquake struck around 95km from Christchurch but shaking has been widely experienced including in Wellington.

IAG New Zealand has extended its reinsurance protection to help it pay for claims from the Canterbury earthquakes again, purchasing a $900m adverse development cover through in internal reinsurance transaction, with the majority of the risk retroceded to third-parties.

The longer-tail nature of some earthquake loss events continues to be demonstrated by the Canterbury, New Zealand disasters, with the Insurance Council reporting that paid insurance losses have now hit $19 billion, up $1 billion since the end of June.

The Insurance Council of New Zealand said that private insurance and reinsurance firms have now paid out more than $18 billion to settle commercial and residential claims from the Canterbury earthquakes, but ever since the quakes the magnitude of the loss has been filled with uncertainty.

Global reinsurance firm Swiss Re’s first-quarter 2016 results were impacted by weather derivative losses and further adverse development from the New Zealand earthquakes, which could signal impacts more broadly, perhaps affecting some insurance-linked securities (ILS) players.

Australian insurance group IAG has reported its results, revealing continued deterioration of its Canterbury, New Zealand earthquake claims, challenging commercial market conditions and new reinsurance arrangements with Warren Buffett’s Berkshire Hathaway.

The 2011 Canterbury, New Zealand earthquakes continue to demonstrate how complicated an event major earthquakes can be, in terms of calculating losses, as Insurance Australia Group (IAG) revealed further impacts to its bottom-line from claims deterioration.

In a reminder that catastrophe claims are not always settled rapidly and that it can take some years before the final insurance industry loss and impact to reinsurance markets is clear, IAG has revealed another deterioration in its loss due to the 2011 Canterbury, New Zealand earthquakes.

The New Zealand Earthquake Commission (EQC), a state-backed provider of earthquake insurance coverage, is seeking greater flexibility in its use of reinsurance, including the ability to issue catastrophe bonds as part of its risk transfer.

The New Zealand Earthquake Commission (EQC), provider of natural disaster insurance to residential properties and administrator of the NZ Natural Disaster Fund, acknowledges that the ILS and convergence trend has helped it when buying reinsurance.