By Hannah Lynch
New Zealand insurers say there are no plans to increase premiums beyond what most have already announced in the wake of what's been touted the most costly insurance disaster in the world, but won't rule out the possibility.
Before the June 13 6.3 magnitude earthquake, insurers had signaled or confirmed premiums increases between 20%and 50%. Since then council-owned insurrer Civic Assurance failed to get reinsurance and Standard and Poor's warned reinsurance costs would triple.
AA Insurance Head of Corporate Affairs Suzanne Wolton said Tuesday that the latest earthquake would not impact current premiums which the company announced in May were rising $200 and $300 a year on average.
"We can't foresee a further increase, but it does depend on the reinsurance process going forward," she said.
The country's third largest insurer, AA Insurance increased its premiums on household insurance by an average of 50%.
AMI, whose current reinsurance programme is set to lapse on Friday, also announced earlier this month it's premiums across all products would be going up 15-20%. (see article by Hannah Lynch).
IAG and Tower Insurance (who also have an exposure to the Christchurch market) also plan to increase premiums however the amounts have not been finalised.
IAG Head of Corporate Affairs Craig Dowling said events in Canterbury and around the world over the past 18 months had impacted reinsurance to the extend that premium changes were necessary.
Dowling said that increases were in the process of being implemented, but they were being manifested differently across the company's insurance brands.
IAG trades under the NZI and State Insurance brands and underwrites general insurance business for some of the country’s leading financial institutions.
Dowling said the changes are currently being communicated to customers.
He said increases in the "company premium" (the component the insurer charges excluding EQC and Fire Service Charges) for home insurance with State, Lantern and NZI brands are likely to range from 15 to over 20%.
"These changes are to ensure we are in a strong position and able to offer quality insurance cover for future events," he said.
IAG customers can expect to see changes as they renew their individual policies.
A media spokesperson for Tower Insurance confirmed the company would be making adjustments to its premiums in line with competitors.
New Zealand's only listed insurance company Tower increased it premiums by 4% last year and then a further 7% in January.
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