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The Insurance Council has announced today that its members now estimate the cost of the earthquake will be $10 billion. Insurance Council Chief Executive, Chris Ryan, says "this is an initial estimate, and it is possible that this figure will rise."

Insurers are now writing cheques to Canterbury businesses ranging from $5,000 to tens of millions of dollars.

Insurance Council members pay all insured costs over $100,000 for people's homes and for all commercial businesses and buildings damaged by the earthquake.

A significant part of the payments will involve repairing or replacing commercial buildings, and for loss of profits, damaged stock and plant, and business interruption for businesses around the Canterbury region.

The Insurance Council Chief Executive says "this very large payment into the Canterbury community over the next 12-months, should give Cantabrians cause for some optimism that the insurance industry is responding to their needs and will see the rebuilding of the Canterbury community."

Chris Ryan thanked the Cantabrians affected by the earthquake for their patience and understanding during the last two months, which has seen the insurance industry stretched to capacity with well over 200,000 claims already and still growing substantially by the day.

The Insurance Council has also indicated that this earthquake will be seen on an international scale alongside some of the other larger insured events of the last 12-months. "Adding together the $5 billion from the private sector, and possibly the same amount from the Earthquake Commission, this could end up being a $10 billion or more injection into the Canterbury region."

However, the Insurance Council is also indicating that in coming years New Zealand may see an increase in premiums as a consequence of this event. "Premium rises are likely to impact on New Zealand as a whole, not just the Canterbury region. The size of increases is very hard to predict as there are forces driving premiums down as well as up. However, the large part of the $10 billion now estimated to be paid to New Zealand comes from international companies, and over the next few years there is likely to be some cost to all insured parties as a consequence."

"The Insurance Council pays tribute to the resilience and strength of the Canterbury community and thanks them for their enormous understanding and patience during a time of great difficulty, not only for them and their families, but also for the insurance industry in responding to the needs of their customers."

For further information, please contact:
Chris Ryan, Chief Executive
Tel (04) 472 5230;

 

 

 

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