Kikoura: Reinsurers ‘might re-negotiate’

In the wake of the 7.8 magnitude Kaikoura quake in 2016, Insurance Council chief executive Tim Grafton said international reinsurers he has spoken to were “mildly interested but not deeply disturbed” by the Kaikoura damage.

“There was no balking at providing our insurance cover, but that’s not to say we haven’t had signals that reinsurers might want to renegotiate price.”

Grafton said one insurer had found reinsurers planned to renegotiate their rates post-Kairkoura. He said the revelation comes as no surprise, given the increase in seismic activity and billions in earthquake damage over the past six years.

“That’s not something you would prudently look at and ignore,” Grafton said, according to a report by Taranaka Daily News.

A report from GNS found 2016 had an abnormally high number of earthquakes.

GNS principal scientist Kelvin Berryman said the cascading fault ruptures, like those in the Kaikoura quake was included in earthquake models used by reinsurers and insurers, but “not quite as complicated as what we’ve seen.”

Berryman said Risk Management Solutions, which does risk modelling for IAG and released a new New Zealand risk model in July 2016, did not think any significant changes were needed to their risk model.