New Zealand insurers face rate increases of more than 10 per cent for the renewal of their insurance during 2011, as the bill from the Canterbury earthquake continues to mount.
But the rise is not expected to hit consumers' wallets for another one or two years.
Latest estimates from the world's largest reinsurer Munich Re put the claim bill from the Canterbury earthquake at $600 million, nearly $200 million higher than initial estimates and the largest insured loss for the company in quarter three last year.
Munich Re said global losses amounted to US$130 billion during 2010, making last year among the "six most loss-intensive years" for the company since 1980.
Munich Re board member Dr Ludger Arnoldussen, who was in the country to speak with insurers, praised the efforts of those companies which handled the claims and the stringent building standards that were in place here.
He said while there was some uncertainty as to the final price tag from the earthquake, with the Earthquake Commission still assessing claims, indications were Munich Re would need to reassess its pricing model for New Zealand.
"At this stage it's too early to say - there's still a lot of estimates rather than paid claims ... but I think, in my experience it would be likely that we would see a significant rates rise for the New Zealand earthquake risk," he said.
Arnoldussen said the hike in rates was also likely to translate to higher premiums for policy holders, the extent of which would depend on how much risk the individual companies were prepared to carry.
"It's open to competitive pressures, but in many cases when you see a high percentage of claims then the insurance companies will try to pass on the increase," he said.
Meanwhile latest figures show the number of catastrophic events in New Zealand quadrupled in the 30 years to 2010, and that 90 per cent of all insured claims during that period were the result of geophysical events.
"From the reinsurance perspective what is interesting and concerning is the number of claims from Australia and New Zealand. There's been quite a string of events.
"We are somewhat concerned as an industry because Australia and New Zealand in the past were considered attractive because they diversified our risk book.
"Do we now have to reconsider how we look at this risk? In my view there's a high likelihood that reinsurance prices will continue their way up," he said.
However rates would remain well below those in California, with policy holders there on average paying about 15 times more than in New Zealand, he said.