23 Dec 2014

IAG ups quake cost estimate

7:12 pm on 23 December 2014

Major insurer Insurance Australia Group (IAG) expects the final cost of Canterbury earthquake claims to be as much as $4 billion.

Liquefaction in the Christchurch red zone.

Liquefaction in the Christchurch red zone. Photo: RNZ / Diego Opatowski

IAG's previous estimate of total claim costs was $3.25b but it now says it expects that to increase by between $750 million and $1 billion.

The figure had been revised because of higher-than-forecast repair and rebuild costs; the continued notification of new household claims which exceeded the Earthquake Commission's $100,000 limit; and a series of adverse court judgements that have impacted the insurance industry, the company said.

A formal assessment of its costs position would be finalised in conjunction with its 2015 first half results, due for release on 18 February.

Get the new RNZ app

for ad-free news and current affairs