New Zealand’s Natural Hazards Commission Toka Tū Ake (NHC) has secured a record NZ$12.3 billion reinsurance programme for the year ahead. The NZ$2.1 billion increase, equivalent to 20%, was secured at a lower cost than last year’s smaller tower.
The commission said the result reflects reinsurer confidence in New Zealand’s natural hazards scheme. Reinsurance costs across the broader market have stabilised following earlier spikes, making conditions more favourable for buyers.
The reinsurance programme has expanded steadily from NZ$7 billion in 2021 to NZ$12.3 billion for 2026. The 2026 renewal marks the largest single-year increase in that period.
The tower attaches at NZ$2.2 billion of losses. Claims below that level are met from levies paid by insured homeowners into the Natural Hazard Fund.
How quickly those claims can accumulate became clear in early 2026. The NHC recorded 824 natural hazard claims in January and February alone, including 493 for landslide damage and 170 for storm and flood damage.
Severe weather affected Northland, the Coromandel Peninsula, Bay of Plenty and the East Coast. None of those events came close to triggering the reinsurance tower, but they show how frequently claim activity builds well below the attachment point.
NHC chief executive Tina Mitchell said the expanded programme strengthens New Zealand’s financial readiness.
“Securing increased reinsurance cover means New Zealand is better placed to respond financially when a major natural hazard event occurs,” she said. “It provides confidence that funding will be available to help pay claims and support recovery, while helping protect the Crown’s balance sheet.”
The Natural Hazard Fund currently holds approximately NZ$800 million. A disaster generating claims above that level but below the NZ$2.2 billion attachment point would require the Crown to bridge a gap of up to NZ$1.4 billion.
The gap reflects how the scheme is structured and funded. New Zealand depends heavily on offshore reinsurance, which means global market conditions feed directly into domestic costs. The Crown guarantee behind the scheme shifts extreme loss scenarios onto the public balance sheet.
The levy structure is also uniform at 16 cents per NZ$100 of building cover, meaning lower-risk households subsidise those in higher-risk locations. The government deferred a Treasury recommendation in November 2025 to raise the levy to 24 cents, citing cost-of-living pressures.
Mitchell said reinsurers had choices about where to place their capital.
“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,” she said.
The NZ$12.3 billion figure looks large until it is measured against modelled risk. The Reserve Bank of New Zealand modelled a magnitude 8.7 earthquake along the Hikurangi Subduction Zone with estimated property damage of NZ$62 billion.
The figure rises to NZ$100 billion when extrapolated across the full market. A separate analysis found more than 750,000 residents currently live in flood-risk areas, a number that could exceed 900,000 with three additional degrees of warming.
The NHC last drew on its reinsurance following the 2010/11 Canterbury earthquakes, when NZ$5 billion of cover was used. The current tower also includes a NZ$225 million catastrophe bond, Totara Re Pte. Ltd. (Series 2023-1), placed in 2023 and still in force.
