EQC Successfully Renews New Zealand $6.2b Reinsurance Programme
EQC has successfully renewed its $6.2 billion reinsurance programme for the forthcoming year.
“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, said EQC’s Chief Executive Sid Miller.
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.
“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.”
To date, EQC’s reinsurance has been used once, in relation to 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.
“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” Mr Miller commented.
New Zealand is exposed to high levels of natural hazard risk so EQC and its broker Aon, work hard to build confidence in New Zealand and maintain access to reinsurance.
Mr Miller commented that “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.”
“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 said.