Reinsurance costs rise to 15% of GWP in the first half of 2013
IAG, one of Australasia’s biggest insurers, has detailed the effect of reinsurance rate increases in New Zealand following the two earthquakes in Christchurch in September 2010 and February 2011.
Economic losses following the M7.1 quake in 2011 came to about $16bn, of which approximately $13bn was insured.
Reinsurance rates have increased to 15% of gross written premiums in the first half of 2013, up from around 8% for the full year in 2010, pre-earthquake.
In its overview of the short-tail market in New Zealand, the insurer noted that it had seen a growth of 35% since 2009, driven by significant rate increases to recover post-earthquake hikes in reinsurance costs. Reinsurance capacity continues to be available.