23 Sep 2011

PM rejects insurance uncertainty claim

12:28 pm on 23 September 2011

Prime Minister John Key is rejecting suggestions that New Zealanders prepare for a time when their insurance policies will not cover earthquakes and other natural disasters.

The country's major insurers have secured reinsurance cover for at least the next year but Insurance Council's chief executive Chris Ryan says beyond that, cover for natural disasters looks uncertain.

Mr Ryan says the level of seismic risk is prompting international reinsurers to reconsider their long-term investment here.

Many of these international companies have lost money from expensive claims for disasters in New Zealand, Queensland and Japan.

But John Key the Insurance Council's warning runs counter to discussions the Government has had with insurance companies around the world.

"We believe that they remain committed both in the insurance and re-insurance market in New Zealand."

Earthquake Recovery Minister Gerry Brownlee, who held discussions in Europe recently with insurance firms, says the those he has spoken to have made no suggestion of reducing their cover.

Mr Ryan, meanwhile, says New Zealand should look to countries such as the United States and Japan where alternative catastrophe cover has been set up.