The spate of natural disasters that have hit New Zealand in recent years will not scare off reinsurers, according to the latest report from S&P Global Ratings.
With a number of general insurers exceeding their budgeted catastrophe allowances, and claims being settled much quicker compared to the 2010-2011 Canterbury quakes, S&P said insurers are continuing to benefit from the continuing soft state of the global reinsurance market, according to an interest.co.nz report.
This increases confidence in reserving and capital, S&P said.
S&P also said the review of the
EQC act hints on positivity for the industry, with the suggestion that the
EQC will no longer provide contents insurance, an increase in the market size and growth opportunities for private insurers should be expected.
“Moreover, the extent of insurers' exposure to earthquake risk is lessened with the proposal to increase the EQC building claims coverage cap to $150,000 from $100,000,” S&P said. “We believe New Zealand's P&C market will continue to post solid underlying results over the next year underpinned by a sound economy, which should support good premium growth at the retail level, and some degree of further upward movement in prices for commercial lines of business.”
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