The end is in sight for insurers settling claims from the Canterbury earthquakes, but their costs from the events are also rising.

In profit announcements last week Suncorp and Wesfarmers both increased their provisions for quake claims.

Suncorp added $27 million to its cost estimate, which Vero New Zealand CEO Gary Dransfield says reflects a greater understanding of the final number of large domestic claims.

He says the company will have settled 70% of claims by the end of this month.

Group CEO Patrick Snowball says Suncorp expects by year-end to have settled or have contracts in place for outstanding domestic claims.

The state-owned Earthquake Commission (EQC) covers the first $NZ100,000 ($92,098) of residential damage, then passes the remainder to the owner’s private insurer.

Mr Snowball says the company is still receiving EQC notifications, requiring it to investigate claims and deal with the complexity of apportioning damage to quakes within the series.

Wesfarmers increased its reserve estimates for the February 22 2011 earthquake by $45 million, which “reflects higher expected repair costs following better assessment of the worst-affected earthquake areas”.

At December 31 Lumley had settled 70% of claims from the February event, compared with the industry average of 60%. It has a work program scheduled to the end of next year.

Wesfarmers Insurance MD Anthony Gianotti told insuranceNEWS.com.au Canterbury is an “inherently difficult” event to manage, with many stakeholders involved.

The home rebuild program, for which cost estimates have increased, started only about a year ago, and costs have become clearer as the company completes properties, gains more certainty on land issues and plans its work program.

“There are issues around land remediation and land zoning that needed to be sorted through and that has implications for rebuilding costs,” Mr Gianotti said.

Rebuild costs are also harder to determine because houses were insured for total replacement rather than sum insured when the earthquakes struck.

“That has made it more difficult to determine rebuild costs, because they are uncapped.”