The Earthquake Commission (EQC) has secured a record level of reinsurance of $7.2 billon on the international market, an increase of nearly $470m.
Building on the successful renewal of the previous year, it means that EQC has grown by $1.2 billion over the past two years to support New Zealand homeowners to get access to affordable home insurance.
The reinsurance markets have hardened significantly over the past few months. EQC must be extremely pleased to be able to secure this level of reinsurance for New Zealand homeowners.
The international reinsurance market has tightened in response to considerable losses over the past five years from catastrophic floods, storms and wildfire events and is also dealing with additional global pressures through the covid pandemic and the war in Ukraine.
The EQC model is exceptional in the world and, even in challenging times, it continues to be well supported by global insurers.
Despite living in a country with a variety of natural hazards, EQC can be proud its investments in world-class research and modelling gives reinsurers confidence in the risks they are insuring and what they are doing as a country to understand and manage our risks.
Attracting the global support is definitely a case of New Zealand punching above its weight on the global stage and the financial backing is one of the key benefits the EQC scheme delivers for New Zealand homeowners.
It ensures natural hazard home insurance is accessible and reasonably priced despite the hazards such as floods and earthquakes in New Zealand.
While the Government will double the EQC cap from $150,000 to $300,000 on October 1, Mitchell explains that this did not mean that its reinsurance also had to double.
The large majority of expected EQC claims sits within the original cap, so any increase will support the anticipated small number of homes that suffer damage above $150,000.
