The flow of capital into reinsurance markets has led to softening rates in Australia and New Zealand, Willis Re Head of Broking Glen Riddell says.

Rates for New Zealand property exposure leaped after the Christchurch earthquakes, he told the TIO Insurance conference in Darwin. But even there the pressure of capital flows and two relatively benign catastrophe years have led to softer rates. 

Responding to Darwin brokers’ questions on the impact of catastrophe models, Mr Riddell says the models are not perfect “but they are the best tools we have. The models are continuing to get better and better.” 

Although Darwin’s cyclone exposure is well known following Cyclone Tracy in 1974, Mr Riddell says the city now has some of the strongest building codes in the world.

“It would be much more resilient now if another Cyclone Tracy hit. There is a greater accumulation of insured value now but stronger building codes have made Darwin a better risk.”