Modeler Risk Management Solutions (RMS) said most of the losses from the earthquake in New Zealand will be residential, with a majority being paid out by the Earthquake Commission.
Modelers estimate insured losses of between $1 billion and $4.5 billion from Saturday's magnitude 7.0 earthquake in Christchurch, New Zealand.
Fitch Ratings said Insurance Australia Group Ltd. (IAG) and Suncorp-Metway Ltd. have 60 percent of the property market in New Zealand.
IAG said in a statement it expects claims costs to be entirely covered by its reinsurance arrangements. The company said it has responded to more than 2,000 calls and that it is too early to determine the extent of damage to covered properties.
Suncorp said its financial exposure "is likely to be limited due to New Zealand's statutory framework and [Suncorp's] conservative reinsurance arrangements."
One of New Zealand's oldest insurers, TOWER Insurance said in a statement that call volume has been five to six times the norm and it has deployed additional insurance adjusters to Christchurch.
RMS said about 60 percent to 70 percent of insured losses from the quake will come from residential claims, with the remaining claims coming from commercial and industrial claims. Some claims are expected to surpass the Earthquake Commission's limit of about US $72,300 (NZ $100,000) and go into excess policies.
The commission was started by the government in 1945 and currently has about $5.6 billion in the fund, which is backed up by reinsurance from overseas groups.
"The focus is now on assessing damage in the suburbs, with the priority being Brooklands and Bexley," said Ben Fox, senior catastrophe response analyst with RMS. "An estimated 500 buildings have already been condemned in the region, and approximately 100,000 of the 160,000, or almost two-thirds, of the houses in the region suffered some degree of damage during the earthquake."
Just 5 percent of the 970 buildings in the Christchurch Business District are considered unsafe, according to RMS' building evaluation team. Further assessment is required for 25 percent of the buildings, and the remaining 70 percent were deemed safe.
