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EQC revises its cost estimate for Canterbury earthquake
20 December 2010
The Earthquake Commission has revised its estimate of the cost of EQC claims for the Canterbury earthquake on 4 September to between $2.75 billion and $3.5 billion.
However, EQC is only liable for the first $1.5 billion of the cost of claims after which its reinsurance takes effect. EQC's reinsurance covers the costs between $1.5 billion and $4 billion.
The $1.5 billion cost to EQC has already been accounted for in the Crown accounts.
EQC chief executive Ian Simpson says the revised estimate is based on an actuarial report commissioned in November. It includes expenditure on claims payments, claims handling and the Fletcher Construction project management office.
"EQC's initial cost estimate of $1-2 billion in late September was based solely on the size and location of the earthquake and was made prior to all the claims being lodged with EQC.
"Under that modelling EQC was expecting just over 100,000 claims. In the end the number of claims lodged was far higher," Mr Simpson says.
"We won't know the final cost of the Canterbury earthquake until all 160,660 claims lodged with EQC by 6 December have been assessed, which we are aiming to have completed by the end of March next year," he says.
"Based on the revised cost estimate, we have now contacted our reinsurers to request an initial payment," Mr Simpson says.
"I would like to thank the people of Canterbury for their ongoing patience during what is undoubtedly a stressful time, and to reassure them EQC is working as quickly as we can to complete assessments and settle claims."
EQC will be operating right through the Christmas holiday period with 225 loss adjustors and estimators on the ground working to assess and process claims. Call centres will also remain staffed 24 hours a day and seven days a week during this period.
END
Further information:
Jo Martin Communications Adviser
Phone: (029) 978-6430
Email: info@eqc.govt.nz