New Zealand insurance premiums have begun to rise as reinsurers price for higher risk following the Christchurch earthquakes.

Price rises across the country, rather than just the Canterbury region, have drawn fire from clients, who are being warned to expect increases of up to 50% in residential premiums. 

Brokers say Auckland businesses are seeing increases of up to 30%, while commercial business in Wellington – regarded as an earthquake high risk – are seeing prices rise by 50%.

Marsh NZ Country Head Grant Milne says while the rises are a shock for clients, they have enjoyed the benefits of a competitive market for a decade, with earthquake rates being discounted. 

He cited the example of rates in the Hawke’s Bay region, which have only now returned to the level that was paid when he worked there 10 years ago.

Earthquake rates in Canterbury, once considered low risk for quakes, have quadrupled in some cases as reinsurers reassess their risk models. New Zealand’s relatively small population also means that the pain is felt by insured clients nationally.

Vero NZ incoming CEO Gary Dransfield says premium increases reflect the impending renewal of reinsurance treaties and the losses reinsurers are carrying from Australia, New Zealand, Japan and the US tornadoes.

“You will see the implications for pricing across the range of property-related classes,” he told insuranceNEWS.com.au.

Mr Dransfield says both the New Zealand and Australian markets have been reasonably soft for commercial business in recent years. The Australian market began to turn with the Victorian bushfires three years ago.

“Consumers have done well out of a competitive market in the last few years,” he said.