NZ Natural Hazards Commission raises reinsurance cover to $6.2bn
The Natural Hazards Commission Toka Tū Ake (NHC) of New Zealand has announced an increase in reinsurance coverage to NZ$10.3bn, aiming to enhance the financial resilience of homeowners in the face of natural disasters.
The new coverage marks a NZ$1.15bn increment from the previous year’s reinsurance total and includes NZ$225m from a multi-year catastrophe bond placed in 2023.
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The NHC last utilised its reinsurance programme following the Canterbury earthquakes, with reinsurers contributing approximately NZ$5bn towards recovery costs.
NHC CEO Tina Mitchell said: “One way we ensure there is funding available to pay claims for natural hazards damage is by purchasing reinsurance – insurance for insurers.
“All insured homeowners across New Zealand contribute levies to the scheme. We use a proportion of those levies to purchase reinsurance cover at a national level.
Mitchell added: “The scheme is held in very high regard globally. Our long-term investment in research and modelling means we can give reinsurers a transparent understanding of the risks they are insuring.”
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By GlobalDataFollowing legislative changes in 2023, the entity previously known as the Earthquake Commission (EQC) has been renamed and its scope expanded.
The Natural Hazards Insurance Act 2023, which came into force on 1 July 2024, replaces the Earthquake Commission Act 1993.
It introduces a modernised framework for insurance against natural hazards, considering the experiences from earthquakes and the findings of the 2020 Public Inquiry into the Earthquake Commission.
The NHC now offers insurance and expertise for natural hazards, not limited to earthquakes.
Correspondingly, the EQCover insurance product has been named NHCover, and the Natural Disaster Fund is now known as the Natural Hazard Fund, aligning with the organisation’s broadened focus.
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