Insured losses from the earthquake in New Zealand last week may range from $NZ1.15-$NZ5.3 billion ($1.06-$4.9 billion), catastrophe modeller AIR Worldwide estimates.

Assistant VP Bingming Shen-tu says the magnitude-7.8 quake was the largest to hit the country since the 2009 Dusky Sound quake, and one of the four most powerful since 1855.

More than 80,000 landslides and 2600 aftershocks have been recorded. The earthquake struck near the small tourist town of Kaikoura, halfway between Christchurch and Wellington.

Ratings agency AM Best says it is too early to determine the impact on the New Zealand insurance sector, but claims are likely to undermine the underwriting performance of some businesses, particularly those with high-risk accumulations in the upper South Island and lower North Island.

“For most insurers, reinsurance is expected to reduce the overall impact on the sector,” it says.

AIR Worldwide says Christchurch – which was hit by devastating earthquakes in late 2010 and early 2011 – suffered additional damage in the latest event, and the Canterbury area may account for up to 30% of total losses.

In Kaikoura 13 buildings were tagged as unsafe for use, while 39 received yellow tags denoting restricted use.

Wellington Mayor Justin Lester has reported about 10 major buildings with extensive damage, and 60 buildings sustained superficial damage.

Robert Muir-Wood, the Chief Research Officer at modeller RMS, says landslides have blocked the road linking the northern South Island ferry port of Picton with Christchurch, and ferries may have to ship supplies to the southern city as long as the route remains closed. The damage may take months or even years to repair.

“Therefore it appears the biggest consequences of the earthquake can be expected to be logistical, with particular implications for any commercial activity in Christchurch that is dependent on overland supplies from the north,” he said.

Dr Muir-Wood says there is potential for a follow-on major earthquake on faults running beneath Wellington, but the chances are highest in the few days after a big quake and then tail off.

Most residential damage will be covered by the government-owned Earthquake Commission, which is backed by $NZ4.7 billion ($4.3 billion) in reinsurance.

Munich Re estimates insured losses from the February 22 2011 Christchurch earthquake were $US16.5 billion.

That quake killed 185 people and caused the most damage in a series that started late the previous year. A quake on September 4 2010 caused insured losses of $US7.4 billion, Munich Re says.