Labour's Goff says 12 month Christchurch insurance impasse would be too long; Labour govt would step in as insurer of last resort sooner than that

Labour would intervene in the insurance market within the next 12 months if private insurers or their reinsurers did not come to the table writing new policies in quake-hit Christchurch, leader Phil Goff says.

Goff announced the party’s earthquake policy last week, saying if Labour were in government after the November 26 election, it would be prepared to act as an insurer of last resort in Christchurch if the private market did not find a solution to the impasse that is seeing insurers wary of expanding their books and writing cover for new customers.

Insurance Council CEO Chris Ryan said last week that while all private insurers and the Earthquake Commission had secured reinsurance for the next 12-24 months, reinsurers might be reluctant to provide further natural disaster cover in New Zealand beyond that.

"While it is a fact that all the major insurers in New Zealand currently have reinsurance cover for at least the next 12 months, beyond this, 100% reinsurance cover is not a guaranteed feature of the insurance landscape in this country," Ryan said on Friday.

That could mean private insurers here would be reluctant to write policies if they were not sure whether they themselves could secure reinsurance again once their current cover expired, which could lead to a rebuilding stalemate in the city.

Minister for Earthquake Recovery Gerry Brownlee, who has just returned from meeting the world's biggest reinsurance companies in Europe, attacked Ryan for his comments, saying he was scaremongering.

"Until you have individual insurers stepping up and saying they no longer want to be in our market, I don't believe the Insurance Council's position is credible," Brownlee said on Friday.

But Labour leader Goff said Ryan’s comments needed to be taken into consideration as they had cast doubt on whether reinsurance would be available more generally for earthquakes in New Zealand.

“If that’s the case, then the government will be forced, whatever it might think, to take some action to ensure that there is proper protection in place,” Goff told media at his regular Monday afternoon press conference.

Goff said his position had always been that the best option was for the insurance industry to “take up its responsibilities to provide that insurance”.

“If however, it declines to do that, if it refuses to do that, despite pressure from government, then government has a choice of either standing back and nothing happening, and people not able to get into their homes or their businesses and recovery not occurring in Canterbury. That is not an option you can choose,” Goff said.

“I don’t believe that you can wait for anything like that [12-24 months] for the process of rebuilding and recovery to happen in Christchurch,” he said.

“I’m not going to get into whether it’s six weeks or six months, but if the insurance timeframe for Canterbury was to be 12 months to 24 months, that’s too long.”

(Updates with video of Goff)