Reinsurers continue to show “strong support and confidence” in New Zealand’s natural hazards insurance scheme amid a challenging global market, Toka Tu Ake EQC CEO Tina Mitchell says following meetings in Europe and the UK that have set the scene for the next annual renewal.

Ms Mitchell says global losses from disasters such as wildfires, floods and storms in the past year have caused some market participants to review their exposures, but Toka Tu Ake EQC has a strong reputation, with a history of investing in risk research and the country taking steps to reduce hazard impacts.

Reinsurers recognise that Toka Tu Ake EQC covers a range of perils, supporting the broad uptake of home insurance, which in turn spreads risks for reinsurers, while New Zealand also offers diversification in the global market, the state-owned insurer says.

“Our risk level may be significant when we are confronted with a major event like the Canterbury earthquakes, but the occasions when we need reinsurance are more infrequent compared to other countries that are affected regularly,” Ms Mitchell says.

Toka Tu Ake EQC has called on reinsurers twice since it started buying cover in the late 1980s. The program has a $NZ1.75 billion ($1.6 billion) excess, with most events paid out from the Natural Disaster Fund, funded through homeowner levies.

The organisation, which gained a record $NZ7.2 billion ($6.6 billion) program for this fiscal year, will prepare a modelling and information pack over coming months, including an assessment of housing growth and inflation impacts, for reinsurers to review before renewal negotiations start in February and March.

“Some firms have indicated that their investors in the current climate have less appetite to invest in natural catastrophe, but some reinsurers have signalled they will increase their involvement, so I am pretty confident as we start the renewal planning for next year,” Ms Mitchell says.

Ms Mitchell met a number of the 28 Lloyd’s syndicates in London that support the Toka Tu Ake EQC program and held preliminary talks with reinsurers at the annual conference in Monaco, with broker Aon attending.

“The meetings in Monaco were a bit like organised speed dating. We met with more than 30 reinsurers in just over two days, with most meetings lasting only 30 minutes,” Ms Mitchell said.

“This provided the chance for me to give a strategic overview of where Toka Tu Ake EQC is at and why it remains a great place to continue to invest and do business.”

Ms Mitchell says it was clear from comments made that reinsurers felt changes to the EQC Act currently before Parliament had been carefully considered and well communicated to them.

The EQCover cap has doubled to $NZ300,000 ($274,011) this year, with homeowners paying a maximum premium of $NZ480 ($438), or $NZ552 ($504) including goods and services tax.