NZ’s Tower and Australia’s IAG say reinsurance will pay out
New Zealand's second-biggest city Christchurch is in a state of emergency after a 7.1 magnitude earthquake but financial markets have said the long-term economic impact is seen limited, Reuters reports.
It was the country's most damaging earthquake in 80 years.
IAG response
Insurance Australia Group Limited (IAG) said it expects claim costs to be entirely covered by its reinsurance arrangements.
It also said the loss from a subsequent major event this calendar year would be capped at a maximum of $175m.
IAG Managing Director and CEO, Michael Wilkins, said “At this stage it is too early to determine the extent of damage to our customers’ property, however, we expect it is likely to be significant.
“From a financial perspective, the entire event will be covered by our reinsurance arrangements.” IAG’s FY11 guidance remains unchanged.
NZ insurers
Chris Ryan, chief executive of the Insurance Council of New Zealand told NZNewsUK: “The cost of the event is unknown at this stage but the vast majority of payments will be from reinsurance.”
New Zealand’s largest listed general insurer Tower, said the earthquake would cost the company about $5m, or $3.5m after tax.
Rob Flannagan, group managing director said: “As far as these events are concerned we carry a large amount of reinsurance so our financial accounts in any one year and capital don’t get hit,” said.
Companies hit
The Sydney Morning Herald has listed the impact of the quake on businesses that have made announcements to shareholders
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