The liquidators of New Zealand-based Western Pacific Insurance have appointed a corporate adviser to sell the company, and say the outcome will determine how much can be paid to creditors and claimants.

Western Pacific went into voluntary liquidation on April 1 after its directors decided it could not meet all its claims as a result of the Christchurch earthquake.

Liquidators Simon Thorn and David Ruscoe of Grant Thornton estimate Western Pacific has unsecured creditors of $NZ3.8 million ($2.8 million) and unsettled claims of $NZ1.9 million ($1.4 million), but warn both these figures could rise as more earthquake claims are assessed.

In their first report, the liquidators note the company has $NZ4.69 million ($3.5 million) in assets listed at book value, including $NZ2.6 million ($1.95 million) of premiums held by brokers and a $NZ500,000 ($376,000) security bond held by the Public Trustee.

The liquidators have appointed corporate advisory firm DH Flinders to sell, transfer or assign the insurance business.

DH Flinders Executive Director Mark Petersen told insuranceNEWS.com.au that Canterbury earthquake claims are excluded from the business for sale, which is mostly New Zealand-based commercial insurance for SMEs and trade associations.

He says there has been “some interest” from New Zealand and abroad.

Western Pacific has about 7000 policyholders in New Zealand, and about half of its South Island business is in the Christchurch area. The liquidators say it also has exposure in Australia and the wider Asia-Pacific region, but Mr Petersen says this is a small part of the business.

The liquidators have kept the company’s claims department operating and say they are reviewing and checking that all insurance policies are valid and reinsurance arrangements are in order.

“There is a significant amount of unpaid premium income due to the company which we are endeavouring to collect,” they said. It’s understood most of this is premiums being held by brokers.

“We are also aware of amounts due from the company’s reinsurance arrangements that we are seeking to recover.”