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Quakes sent NZ insurers into deficit in 2011

New Zealand’s insurance industry fell into deficit last year because of Christchurch earthquake claims.

Statistics NZ says the health and general insurance sectors had a $NZ429 million ($332 million) surplus in 2010 but slipped to a deficit of $NZ2.17 billion ($1.68 billion) last year when expenses rose 83% to $NZ2.71 billion ($2.1 billion).

“This increase was caused by the very large net claims expense incurred by insurance companies as a result of widespread earthquake damage to property,” the report said.

Insurers’ current assets rose by $NZ10.89 billion ($8.4 billion), or 231%, because of reinsurance recoveries but current liabilities, due within a year, rose 278% to $NZ10.65 billion ($8.25 billion) because of earthquake claims.