A reinsurer to the New Zealand Earthquake Commission (EQC) has renewed on an annual instead of a three-year basis following claims from the Christchurch events.

The EQC has four reinsurance contracts – two now renew annually and the other two are three-year contracts, which fall due next year and 2013.

Acting EQC CEO Bryan Dunne blames uncertainty about New Zealand risk for the change in term, and says the price has doubled for the latest renewal.

The commission has accepted more than 380,000 claims since the first earthquake on September 7 last year.

Meanwhile, Standard and Poor’s (S&P) has listed Christchurch City Council’s difficulties in gaining insurance as a reason for downgrading its credit rating from AA+ to AA.

The council’s GM Corporate Services Paul Anderson says the organisation is continuing to work with its brokers to secure cover as soon as reinsurers return to the market, and the AA rating is the same as that held by Auckland City Council and the country’s four major trading banks. 

“S&P also noted its concerns at the negative impact of the earthquake on the local economy and uncertainty as to the impact of this on the city’s rating base,” he said.

“However, the council has already built into its budgets a reduction in its rating base. We expect this to recover as the rebuild accelerates over the next three years.”