NZ Natural Hazards Commission secures record limit at June 1 renewal

By Ryan Hewlett

June 5 - (The Insurer) - New Zealand’s Natural Hazards Commission Toka Tū Ake (NHC) increased the total limit on its reinsurance programme to NZ$10.3 billion ($6.2 billion) from June 1 to help protect the country’s homeowners from the impact of natural hazards.

This marks an increase of NZ$1.15 billion from the state-backed property disaster (re)insurer’s previous reinsurance cover.

The renewal takes the NHC’s reinsurance tower to a new record size, up from NZ$9.2 billion in 2024, and marks the continuation of the organisations’ strategy to secure as much limit as possible from international markets.

NHC has consistently looked to grow its June 1 renewing reinsurance cover over recent years, from almost NZ$7 billion in 2021 to NZ$7.2 billion and NZ$8.2 billion in 2022 and 2023, respectively.

The NHC said in a statement on Thursday that the NZ$1.15 billion increase from last year’s total reinsurance cover includes NZ$225 million from its Totara Re multi-year catastrophe bond placed in 2023.

NHC CEO Tina Mitchell said new and returning international reinsurance markets showed “unprecedented confidence” in New Zeeland’s natural hazards insurance scheme at renewal.

“The scheme is held in very high regard globally. Our long-term investment in research and modelling means we can give reinsurers a transparent understanding of the risks they are insuring,” said Mitchell. “We are pleased to secure this level of reinsurance for New Zealand.”

All insured homeowners across New Zealand contribute a levy to the scheme which is used in part to fund its reinsurance purchasing.

The cover is triggered when a loss from a significant natural disaster exceeds NZ$2.2 billion.

NHC said it last claimed on its reinsurance programme after the Canterbury earthquakes in September 2010, with approximately $5 billion of costs covered by reinsurers.