NZ’s disaster insurance ‘less than a billion’: Key

NZ’s disaster insurance ‘less than a billion’: Key

March 14 (BusinessDesk) – The Earthquake Commission has less than $1 billion of disaster insurance available following the September and February Canterbury earthquakes, Prime Minister John Key said today.

Key made the disclosure while announcing a royal commission of inquiry into earthquake building codes, and the collapse of the Pyne Gould Corporation and Canterbury TV buildings, where loss of life was concentrated.

The two natural disasters have hollowed out the EQC fund, which must now renegotiate with international reinsurers for new insurance cover.

With international media reports already putting the cost of the latest Japanese earthquake and tsunami as high as US$35 billion, reinsurance premiums can be expected to rise, although the same reports point out that the reinsurance market had been cutting prices over much of last year because hurricane damages had been less than anticipated.

However, the string of natural disasters in Australia and New Zealand since last September has provoked an expectation that reinsurance in this part of the world will become more expensive than in the past.

Key announced that Justice Mark Cooper will head a three person commission of inquiry, whose other members have yet to be determined. It will be required to issue an interim report within six months of sitting, in the expectation that no urban renewal will have begun by that time.

A final report will be due within 12 months, and is likely to have implications for building regulations nationwide.

Key also said the government’s international relief appeal for Christchurch would be scaled back to target countries that have close associations with New Zealand, in recognition of the scale of the Japanese disaster.

(BusinessDesk)

© Scoop Media