The insurance cost of the Canterbury earthquakes has topped the previous estimate of $NZ30 billion ($23.8 billion) as the cost of claims continues to rise.

The Reserve Bank of New Zealand’s latest Financial Stability Report says the insurance cost from Canterbury is expected to “be well in excess” of $NZ30 billion.

Insurers have paid $NZ10.8 billion ($8.6 billion) so far, with cash settlements boosting the banking system to the point where banks have been able to reduce their reliance on external funding.

The flow of insurance payouts into bank deposits has meant that bank borrowing from abroad has declined over the last year, the report shows.

Private insurers have so far paid $NZ7 billion ($5.5 billion) in claims and the Earthquake Commission (EQC) has paid $NZ3.8 billion ($3 billion).

Statistics NZ estimates that reinsurance claims from the earthquakes will total around $NZ17.9 billion ($14 billion), and the Reserve Bank says bank deposits have also been boosted by reinsurers transferring funds to New Zealand in anticipation of payments to insurers.

There is still significant uncertainty about the total Canterbury insurance claim cost, with the Reserve Bank’s estimates ranging around $NZ10 billion ($7.9 billion).

The bank says the final cost will be influenced by allocation of costs between the EQC and private insurers, litigation, reinsurer disputes, changed regulation, land condition and inflationary pressures.

It says property insurance premiums are still rising nationally, but cover for businesses and households in Canterbury is becoming more widely available.

The report says the rebuild has been hampered by delays in processing private insurance claims, reflecting decisions on land, earthquake building standards, delays in EQC processing and allocations of cost per event.