New Zealand’s EQC Toka Tu Ake has secured record reinsurance of $NZ9.2 billion ($8.5 billion) to cover natural hazards.

CEO Tina Mitchell says the national insurance scheme’s continued growth demonstrates the confidence the international market has in it.

“Once again, we have been really well supported by our reinsurance partners, with many substantially increasing the amount of capital they have committed to the program,” she said.

A spokesperson for EQC says the reinsurance cycle runs from June 1 to May 31 next year.

The $NZ9.2 billion total breaks the previous record of $NZ8.2 billion ($7.6 billion), secured for the current cycle, and includes $NZ225 million ($208 million) raised from a catastrophe bond placed in 2023. The multi-year bond was a first for the government-run entity as it sought diversification through a different investor market.

Ms Mitchell says existing reinsurance partners increased their offers this year, and there was interest from returning and new markets.

“It is always encouraging to see partners returning to the program and new reinsurers wanting to support our scheme,” she said.

“We see this as a huge vote of confidence in New Zealand and our approach to natural hazard risks.”

Ms Mitchell says the EQC only makes a claim for reinsurance when damage from one event exceeds $NZ2.1 billion ($1.95 billion). It has done that twice – after Canterbury earthquakes in September 2010 and February 2011, when EQC received about 500,000 claims, which are estimated to have cost about $NZ12 billion ($11.1 billion).

“Most of the time the EQC scheme is able to cover events, even the bigger events like cyclone Gabrielle, through levies, but reinsurance protects New Zealand from any future devastating events and helps to ensure we will be able to pay claims when they fall due,” she said.