NZ loss could reach $12bn

LOSSES from the earthquake that hit the New Zealand city of Christchurch may total $12bn (£7.2bn), JP Morgan analysts said yesterday.

Repairs on shattered city centre buildings are likely to push insurance claims to double the level paid for the quake that hit the city last September.

The estimate also tops the $8bn top estimate by risk modelling firm AIR Worldwide, which is assessing the damage. It would make the disaster the second-costliest earthquake ever for insured loss after the 1994 California quake, which cost $20.3bn.

JP Morgan analyst Michael Huttner said the number was a “very conservative assumption on our part”.

“We assume that even buildings which are still standing may have hidden structural damage and could then need to be rebuilt,” he said.

Commercial buildings are likely to be privately insured, which could push up the level of exposure for many Lloyd’s insurers, Numis analyst Nick Johnson said. He estimated a total insured loss of $10bn “would not be inconceivable.”

Amlin, which lost $160m from the last quake, is most likely to have a similar loss this time, with Catlin and Beazley among others potentially with some exposure, analysts said.