Lloyd's expect the cost of the Christchurch quakes to reach $5.8 billion. Photo / Simon Baker
Lloyd's expect the cost of the Christchurch quakes to reach $5.8 billion. Photo / Simon Baker
Insurance giant expects to pay further $1.6b and vows to stay committed to Canterbury and New Zealand.
Global insurance giant Lloyd's has paid out $4.2 billion for the Canterbury earthquakes, expects to pay a further $1.6 billion and remains committed to New Zealand.
On his first trip here, Lloyd's chairman John Nelson yesterday told the Insurance Brokers Association of the enormity of reinsurance and insurance payouts because Lloyd's insures the Government's EQC Earthquake Commission and provides reinsurance to the country's biggest insurers.
"Over half of New Zealand's $40 billion of economic losses in 2011 following the earthquakes in Christchurch were picked up by international insurers. Lloyd's has played its part," Nelson said.
"To date, for both the 2010 and 2011 earthquakes, Lloyd's has paid a combined $4.2 billion in reinsurance and insurance claims so far. We expect that the total cost of the events to the Lloyd's market may reach $5.8 billion and of course we are a prominent reinsurer of the EQC," he told the brokers at SkyCity's convention centre.
"I want to reiterate in person today our total commitment to support the physical recovery of Christchurch following the two earthquakes and also restate our promise to support, in whatever way we can, the wider impacts the earthquake has had on the New Zealand economy."
New Zealand insurer Vero yesterday released a report on the Canterbury earthquakes showing it got 31,050 claims for $4.8 billion.
Nelson, head of Asia Pacific Kent Chaplin and Lloyd's New Zealand general representative Wellington-based Scott Galloway will today visit Government ministers and EQC chiefs and tomorrow fly to Christchurch to tour the city with the Canterbury Earthquake Recovery Authority.
Nelson will give a lunchtime address at the Canterbury Club, then visit the upper South Island around Picton later this week.
He expressed sympathy for Canterbury earthquake victims struggling to get resolution from the disasters, including insurance payouts.
"A lot of frustration, a lot of frustration and that's something we have little control over," Nelson said emphasising Lloyd's position behind retail insurers as reinsurers.
"The frustration is born out of the processing of claims and establishing liability because there were two earthquakes in quick succession," he said. "I have huge empathy, huge, of course, of course, and we have done everything we possibly can to be ready and quick with our money.
"I know the frustration and if I was a resident of Christchurch, I would feel that very much but in the scheme of other major catastrophies worldwide, New Zealand should take some credit for how it was handled."
Lloyd's chairman John Nelson.
He also paid tribute to New Zealand's insurance industry.
"The basic structure you have got is a good one but I'm sure there will be lessons learned where improvements can be made," he said, adding that Lloyd's gross written premium income from New Zealand was the 47th largest out of about 200 countries.
The business has been operating here for about a century.
Lloyd's reinsures New Zealand giant IAG, which sells under the NZI, Lumley, State and AMI (New Zealand) brands.
"We cover some of New Zealand's greatest assets - your national airline, your education system, your earthquake commission, your thoroughbreds, your Tall Blacks and many of your All Blacks," Nelson told the brokers.
Lloyd's has also provided insurance for medical workers visiting West Africa for the Ebola outbreak and the ill-fated cruise ship Costa Concordia.
For Lloyd's, 2011 was one of its worst years because of the Japanese tsunami, floods in Thailand and Queensland and the Canterbury earthquakes, Nelson said.
A spokeswoman said the previous Lloyd's chairman, Lord Peter Levene, visited here immediately after the 2011 earthquakes and representatives from Lloyd's syndicates have visited on a regular basis since.
