Ansvar will cancel its New Zealand policies from December 31 due to the “prohibitive” cost of reinsurance.

The specialist religious and historic building insurer will cease providing New Zealand cover but give customers the opportunity to take up temporary cover, excluding earthquake, from Ansvar Australia.

The company says this is intended as an interim measure to give customers time to find alternative insurance. The temporary cover will expire on the same date as their current New Zealand policies.

Ansvar NZ CEO Andrew Moon says he is in discussions to find other insurers to take over customers’ policies, which include personal lines.

Mr Moon told insuranceNEWS.com.au the cost of reinsurance became “horrendous” following the Christchurch earthquakes, which destroyed many historic stone and brick churches and other buildings in Canterbury and focused attention on the stability of similar buildings in the rest of the country.

The company has incurred claims of around $NZ700 million ($535 million) from the quakes.

Mr Moon investigated buying run-off cover but says even this was “so horrendously over the top we could not afford to do it”.

Ansvar says it may be difficult to find insurance for a small number of customers in Christchurch’s red zone, the worst hit area, or those with particular policy types.

The company employs 30 staff in New Zealand and Mr Moon says it will need claims staff for some time.