Today's Coming Crisis Movie

Saturday, July 23, 2011

Reinsurers nearly 'had enough' of Christchurch due to quakes, may pull coverage entirely

Canterbury could be deemed uninsurable as global reinsurers become increasingly alarmed by repeated quakes, a large insurer says.

Vero New Zealand South Island manager Bryan Noonan told Christchurch business owners last night that global reinsurers had "just about had enough" of Canterbury.

There was a risk that reinsurers would cut off earthquake cover completely for Canterbury if they faced increased exposure, he said.

"We have to do the right thing, otherwise it may well be that Canterbury and Christchurch end up without any earthquake cover capacity at all," he said.

Noonan said that could mean putting the brakes on almost all rebuilding in Christchurch "until the ground had settled".

"There has never been anything like this anywhere on the planet involving a city that has had such a huge number of aftershocks."

He cited a case where Vero had spent $400,000 repairing a building after the September 4 quake, only to spend another $100,000 after the Boxing Day quake.

The building was then further damaged in February and was eventually demolished after the June 13 shakes.

"We have to wait for these aftershocks to abate before we make those decisions.

"We have to be very careful because we are not managing our money, we are managing reinsurers and it's a pretty well known fact that the reinsurers have just about had enough." (more)