It takes something for a Kiwi to leave his homeland when it hosts the Rugby World Cup, but Gerry Brownlee headed for Europe for a series of meetings with the reinsurance community.
He was in London and Monte Carlo for the annual reinsurance Rendezvous to in his words, “set the record straight” over the risk earthquakes pose to the Christchurch area following two major quakes in the past year.
It comes against a background of growing concern from both commercial and personal policyholders in the area which say rates are now at a level where they are unaffordable.
The country’s primary writers say the issue is the lack of appetite from reinsurers which in turn is making it almost impossible to offer coverage. There is some degree of evidence to back up the claims with Platinum announcing it would not be renewing its Australasian business in the wake of the earthquakes, and flooding which has blighted the region in the past 12 months.
He told Reinsurance Asia: “The aim of the trip to talk to the underwriters to explain what has been done to de-risk the city. We are and continue to do everything we can to provide the information that the global reinsurance market needs to be able to understand the real levels of risks which are posed in Christchurch and the surrounding areas.
“There has been a great deal of false information circulated about the threat to Christchurch of further seismic activity. It is just scaremongering and is wrong.”
When asked whether it was a section of the business community which was behind the speculation he said: “Everyone seems to be an expert when they have a drink in their hands and it is doing the efforts of the city and its businesses no good whatsoever.
“There was a recent rumour circulating that the depth of the crust above the water table under the city was three feet. It is utter nonsense and if it was true the people in the city would all need boats.”
Mr Brownlee spelled out the steps which had been taken by the country’s government in the wake if the major earthquake in February this year.
Quite frankly the city is in a position where every building built prior to the 1930s is no longer viable and are being replaced,” he added. “We have heard rumours that we are abandoning the central business district but it is simply not the case.
“We have been making every effort to ensure that the city recovers from the damage which has been caused.”
As part of this the country’s government had acquired a number of buildings which have been badly damaged in order to ease the pressure on the demands for claims administration for the insurance industry.
“The aim has been to ensure that the insurers are dealing with the claims for those that need them most and where we can we have purchased property and with it the insurance claims which we are able to put at the back of the queue to give the underwriters the time to deal with claims in a reasonable timeframe,” added Mr Brownlee.
“We have also undertaken full seismic surveys and there is not an area of the city we have not investigated. In fact I would go as far as to say that there cannot be a city in the world where so much is known about what is underneath it in terms of the seismic threat.”
The Minister said his government’s message was not simply one whereby the insurance markets should participate in the Christchurch area without regard to recent events.
“The insurance market in New Zealand is aware prices will have to rise as are the policyholders,” he explained. “But what we are saying to the market is that they need to ensure they have the right information on which to base their underwriting decisions.”