New Zealand’s Natural Hazards Commission Toka Tū Ake (NHC) has arranged a record NZ$12.3bn in reinsurance protection for the coming year, strengthening the financial buffer available to homeowners if a major natural hazard disaster occurs.
The reinsurance programme is NZ$2.1bn larger than a year earlier, a 20% increase.
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According to the NHC, the increased level of protection points to continued backing from international reinsurers for New Zealand’s natural hazards insurance framework.
The commission also said it obtained the programme at a lower overall cost than last year. NHC CEO Tina Mitchell says the result is good news for New Zealand homeowners.
“Securing increased reinsurance cover means New Zealand is better placed to respond financially when a major natural hazard event occurs,” said Mitchell.
“It provides confidence that funding will be available to help pay claims and support recovery, while helping protect the Crown’s balance sheet.”
Reinsurance functions as insurance purchased by insurers.
The NHC this protection from overseas reinsurers using part of the levies collected from insured homeowners and paid into the Natural Hazard Fund.
In an event of a significant natural hazard event, the reinsurance cover helps fund claim payments.
Mitchell said: “International reinsurers have choices about where they put their capital at risk. Their willingness to increase their support for NHC reflects the strength of our scheme, the quality of our natural hazard science and modelling, our ongoing investment in resilience and the transparency of our long-standing engagement with reinsurers.
“This continued support from global reinsurers is an important part of the financial protection available for New Zealanders.
“This programme provides peace of mind that New Zealand will have access to the funding needed to recover from major natural hazard events and support affected communities when they need it most,” she continued.
Formerly known as the EQC, the NHC’s origins date back to 1945, when New Zealand introduced mandatory natural disaster insurance after major earthquakes left large numbers of homeowners without cover.
The scheme later widened to include residential land, while commercial property and contents cover were removed. Claim caps were lifted over time, and greater emphasis was placed on research and reducing risk.
Further changes followed major disasters, particularly the Canterbury earthquakes. In 2021, private insurers took on claims management on behalf of the commission.
Under the Natural Hazards Insurance Act 2023, which came into force in July 2024, the EQC was renamed as the NHC.
