Swiss Re has announced that, based on current information, it provisionally estimates its claims cost from the earthquake in New Zealand on February 22nd to be approximately $800 million, net of retrocession and before tax.
“The total insured claims for the insurance sector for the earthquake in New Zealand are estimated to be between $6 billion to $12 billion,” according to Swiss Re.
The magnitude 6.3 earthquake which struck the Christchurch region of the South Island of New Zealand on February 22nd “caused fatalities and widespread damage, particularly in the city of Christchurch.,” said the bulletin. “While smaller in magnitude than the September 2010 earthquake, this event was at a shallower depth and significantly closer to the central business district of Christchurch, New Zealand’s second largest city.”
Swiss Re’s CEO Stefan Lippe noted: “The latest earthquake in New Zealand took a heavy toll in terms of human fatalities, despite the advanced risk prevention measures that are in place in New Zealand. The purpose of insurance and reinsurance is to help individuals and communities cope with the devastating impact of such events. Our role is to enable the people of Christchurch to recover swiftly from this catastrophe.”
The bulletin also explained that “take up rates for earthquake insurance are high in New Zealand. Residential properties are insured by the government run Earthquake Commission scheme (EQC) up to NZD 100,000 [US$74,232] per building policy and NZD 20,000 [US$14,844] per contents policy. Householders can purchase private insurance above the NZD 120,000 [US$89,066] cover provided by the Earthquake Commission. Commercial and industrial risks are insured by local and global insurance companies.”
Swiss Re’s preliminary estimates suggest the total insured loss for the insurance industry for the latest earthquake in New Zealand will be in the range of $6 billion to $12 billion, “making this a significant event on a worldwide basis.” But Swiss Re added that the “uncertainties in estimating losses from such an event are significant, and this preliminary estimate may change as new information becomes available.”
Source: Swiss Re
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