Fears about a withdrawal of major insurers and reinsurers from the New Zealand market are misplaced, according to Vero NZ CEO Gary Dransfield.

He told the Trans Tasman Business Circle in Auckland last week while there’s conjecture about the industry’s future following the Canterbury earthquakes, the future for the industry in New Zealand is very promising.

Mr Dransfield says insurers are reassessing their businesses, “not to withdraw but to build stronger, more sustainable businesses”.

He also called for a sustainable earthquake insurance approach in New Zealand built around the country’s Earthquake Commission (EQC).

He says the commission should have a wider role in the future to ensure an approach that is commercially feasible, affordable and capable of coping.

“I believe the EQC should remain pivotal for any future earthquake insurance model,” he said. “To do that there will need to be careful consideration given to the adequate level of capital it needs to fulfil its key role and the speed with which that capital is built.

“I believe there would also be merit in considering whether the EQC could have more involvement in the provision of insurance support for commercial properties, as it did in the past.”

Mr Dransfield says the insurance, banking and property industries should join government and regulatory representatives in a working party to study earthquake insurance and recovery management. 

“The EQC could also leverage its national government agency role and act as an aggregated buyer of reinsurance for local underwriters.”

Vero has paid more than $NZ500 million ($379 million) in claims and is managing claims of more than $NZ3 billion ($2.2 billion) at present.