New Zealand was now too risky to reinsurance
On Monday, Finance Minister of England questioned the credibility of an estimate fund of $6 billion in the insurance bill for the Christchurch earthquakes. US which based insurance adviser Eqecat had estimated that on Monday, an earthquake with a scale 6.3 cause losses an additional of $US3b to $US5b ($NZ3.7b to $NZ6.1b) in this region. The figure is over of estimation for the September.
Mr English said that in the next few weeks, the true picture would be clearer, but now the focus is to get information to continue rebuilding and recovery. He argued that New Zealand was now too risky to reinsurance. Moreover, he thought that we’ve all have a little of a knee-jerk reaction on this last earthquake but over time these things settle down.
He also said that after disasters, the track record around the world was insurers reacted with a heightened risk and the series of earthquakes don’t make doubt because it changes the perception of risk in New Zealand for the foreseeable future and we’re all going to have to deal with that reality.
He explained that any extra from the government borrowing will depend on the decisions being made on what would happen to damaged land. The Eqecat said that the earthquake didn’t cause significant damage to buildings undamaged by a quake on February but it will cause incremental damage and loss.
If Monday’s quake occurred suddenly after the February quake, the amount of energy issued would have been the equivalent of about a 0.1 magnitude rise, and the losses probably an additional $US1b to $US2b .