Insurers expect minor exposure from pacific tsunami

By John Grant The Tsunami of 29 September is unlikely to have a significant impact on New Zealand insurers. This is despite Tower Ltd advising of a provision of $3.5m. According to the Insurance Council, other insurers are expected to have relatively few claims. Chris Ryan CEO of the Insurance Council of New Zealand said "Tower are probably the largest insurer in the Tsunami affected region. The other insurers are likely to have fairly modest exposure probably through tourism and transport connections based in New Zealand or Australia. There is also likely to be a fairly low level of insurance in Samoa and Tonga and so despite the devastation, claims will be modest in terms of cost." Most insurers have reinsurance facilities to protect them from major events. Tower Ltd has a reinsurance cap of $5m, meaning the catastrophe cover is not reached until the $5m is exceeded. It appears that the claims will likely fall within companies net retentions. The Insurance Council do not have an estimate of the overall cost of the event to New Zealand Insurers.