The New Zealand earthquake that damaged more than 100,000 homes in September may cause insurance-industry losses of as much as $5.5 billion, according to reinsurer PartnerRe Ltd.
The cost may be at least $4.5 billion, the Bermuda-based company said late yesterday in a statement. PartnerRe said its losses from the quake, which severed water and sewage lines in and around Christchurch, New Zealand’s second-largest city, will range from $140 million to $160 million, more than twice the $64 million that the company projected on Nov. 3.
Cost estimates have been climbing as claims come in since the Sept. 4 quake. Risk Management Solutions, which helps insurers manage catastrophe risk, estimated total costs from the quake of NZ$2.1 billion ($1.6 billion) to NZ$3.5 billion on Sept. 15. New Zealand’s government said on Dec. 13 that the cost would be NZ$5 billion, after more than 160,000 claims were received by the state-owned disaster insurer.
Homeowners and businesses often postpone submitting claims until “they begin to understand the level of damage they have experienced,” said Jayanta Guin, senior vice president at AIR Worldwide, a catastrophe modeler, in an e-mail. The delay “is consistent with other major events like the Chile earthquake of 2010 or the Northridge, California earthquake of 1994.”
AIR has estimated insured losses from the New Zealand quake may be between NZ$2.7 billion and NZ$6 billion.
Hannover Re, Germany’s second-biggest reinsurer, estimated the cost to insurers from the 7.1-magnitude quake would be $4 billion. Chief Executive Officer Ulrich Wallin said at a conference in Monte Carlo on Sept. 13 that Hannover’s loss won’t be a “three-digit million-euro figure.”
The quake that occurred in Chile this year may cost the industry as much as $8 billion, according to catastrophe-modelers AIR and Eqecat Inc. The most expensive earthquake in U.S. history is the Northridge temblor that struck Los Angeles in 1994, causing about $22 billion in insured damages in 2009 dollars, according to data compiled by Munich Re, the world’s largest reinsurer
“In the case of Northridge, it took several years before all the insurance losses were tallied,” Guin said.
PartnerRe fell $1.57, or 2 percent, to $77.87 at 4:03 p.m. in New York Stock Exchange composite trading. The company has advanced about 4.3 percent this year.