The CEO of the New Zealand Earthquake Commission (EQC) has praised the performance of its reinsurance partners following the successful placement of its NZ$6 billion plus reinsurance programme.
In announcing the successful placement Sid Miller, said the programme was a vote of confidence in the organisation and provide much needed security should natural disaster strike.
The EQC is a state entity created to provide natural disaster insurance for residential property (contents, dwellings and some coverage of land). It also We administers the Natural Disaster Fund (NDF), including its investments. Furthermore, it funds research and education on natural disasters and ways of reducing their impact, on the country its population and property.
“Our reinsurance programme is critical to providing cover to New Zealand homeowners for big events like the Canterbury earthquakes, so we’re very pleased our reinsurers continue to back us,” Mr Miller added. “International reinsurers have again shown their ongoing confidence in New Zealand and the Earthquake Commission with this year’s agreement which commenced on 1 June 2020.”
Since 1988, EQC has purchased reinsurance from international markets to ensure that EQC is able to meet the costs of damage arising from large scale natural disasters such as earthquakes and volcanoes.
The programme was placed by Aon and has only been activated once in recent time following the Canterbury earthquakes, where reinsurers are expected to contribute around $4.6 billion of the more than $11 billion that EQC expects to pay out to homeowners when all claims are settled.
“Reinsurance is similar to a large household insurance policy”, Mr Miller said. “The difference is that EQC takes out this cover across the whole country, for the more than 90% of New Zealand homes that are covered by EQC through their private insurance policy.”
“The placement of the reinsurance programme is always a significant milestone for EQC and I am very pleased that we have managed to secure our full programme while managing the global impact of the COVID-19 pandemic on our process and partners” he explained. “EQC’s ongoing investment in natural hazards research and modelling to estimate the financial impact of events all help provide reinsurers with a high level of understanding of the risks that they are underwriting.”