Bermuda Market Assesses NZ Quakes
Bermuda re/insurers are assessing their likely exposures to the latest earthquakes to rock the New Zealand city of Christchurch as analysts estimate the costs will be significantly less than the devastating impact of the shocks earlier this year.
Initial damage reports of a series of temblors yesterday [Dec.22] indicated that buildings in the central business district were again hit.
Residential and commercial properties were also affected, although the extent of the damage was not thought to be significant.
Authorities in the South Island city said it would be some time before a full assessment could be completed. They also warned further quakes might occur in the coming days.
Two 5.9 magnitude quakes yesterday struck Christchurch — New Zealand’s second largest city — some 80 minutes apart. A third quake measured more than 6 on the Richter Scale.
Dozens of people were injured but only 19 required hospitalisation.
The temblors came 10 months after whole swathes of the city were destroyed by another quake and 150 residents were killed.
Financial analysts said that, from first reports, the early signs were that the cost of the damage to the insurance industry would be less than February catastrophe.
That event has been rated the second costliest insured catastrophe loss for 2011 by reinsurer SwissRe, incurring losses of $12 billion.
The Bermuda insurance market already expects to pay out a minimum of $2 billion to help New Zealand and Australia recover from a string of natural disasters that ravaged the Southern Hemisphere neighbours early this year.
Initial combined estimates put out by 19 major re/insurers operating on the island for net losses related to first-quarter catastrophes — which included floods, fires and a cyclone in Australia — ranged from $1.99 billion to $2.37 billion. But the final totals could be far higher.
The earthquake in New Zealand caused massive damage in Christchurch, which had been damaged only last September by a previous earthquake.
Bronek Masojada, CEO of Bermuda re/insurer Hiscox Ltd., told an industry journal just hours after the February quake: “That is what the Bermuda market is here for.
“A few months ago, money from Bermuda helped New Zealanders to recover from an earthquake and now Bermuda is going to help again. That is the value of our product.”
