Earthquake Commission gets larger reinsurance cover

The Earthquake Commission (EQC) has secured reinsurance cover worth NZD4.5 billion, up from NZD3.25b last year, according to chief executive Ian Simpson.

The cost of cover was about 10 per cent lower than last year and the saving was ploughed back in to secure the extra NZD1.25 billion, Simpson added, saying that it was now one of the largest reinsurance programmes in the world.

The earthquakes wiped out EQC's natural disaster fund, and the Crown covers any amount above that. Simpson said the EQC was waiting for a review by Treasury before making a call on rebuilding the fund. He added that the reinsurance markets were getting "softer" and there was a lot more capital coming into the market, including into new "catastrophe bonds," although EQC did not use those.