Swiss Re Says New Zealand Quake Could Cost $800M

Insurers continue to feel the aftershocks of the New Zealand earthquake last month. Swiss Re announced today that based on current information, provisional estimates of its claims cost as a result of the earthquake is approximately $800 million. Additionally, Swiss Re estimates the total insured claims for the earthquake to be between $6 billion and $12 billion.

Swiss Re’s preliminary estimates suggest that the total insured loss for the insurance industry will be in the range of $6 billion to $12 billion.

The magnitude 6.3 earthquake that struck the Christchurch region on February 22 caused fatalities and widespread damage, particularly in the city of Christchurch. While smaller in magnitude than the September 2010 earthquake, this event was at a shallower depth and significantly closer to the central business district of Christchurch, New Zealand’s second largest city, Swiss Re says.

“The latest earthquake in New Zealand took a heavy toll in terms of human fatalities, despite the advanced risk prevention measures that are in place in New Zealand,” says Stefan Lippe, CEO of Swiss Re. "The purpose of insurance and reinsurance is to help individuals and communities cope with the devastating impact of such events. Our role is to enable the people of Christchurch to recover swiftly from this catastrophe.”

A.M. Best also issued a release today noting that catastrophe modeling firm AIR Worldwide estimated insured losses could be as high as $8 billion. The agency goes on to say it believes the cost of calamities in the Australia/New Zealand region have accumulated to impact reinsurers’ profitability, and that it expects reinsurance rates in the region to increase in the forthcoming renewal season.