Australia-based insurer Suncorp Group says an increase in the ultimate claims costs of Christchurch's earthquake a year ago has led to it charging a further $48.8 million against its first-half results.
As at June 30 last year, it had estimated the gross costs would be $2.6 billion but more recent estimates had increased this to $2.9 billion..
Suncorp's reinsurance cover for the year ended June 30, 2011 provided full cover for New Zealand events between $256.82 million and $3.21 billion.
"For NZ events over $3.21 billion, Suncorp shares a small portion of the gross costs with reinsurers," the company said.
Even though the current estimate is still below $3.21 billion, the company has allowed the $48.8 million to ensure a 90 percent level of confidence of sufficiency and to allow for changes in the Australian/New Zealand dollar exchange rate.
"Should claims arising from the February 2011 earthquake settle in accordance with Suncorp's current estimate, the risk margin will reduce by $48.8 million with a corresponding increase in profit," the company said.
A Suncorp spokesman told BusinessDesk the company had already allowed $50 million for the February 22 earthquake in its results for the year ended June 30.
Suncorp said its New Zealand operations contributed an insurance trading result of $16.7 million in the six months ended December 31.
That compares with a $254.2 million trading loss in the six months ended June 2011 and a $6.42 million loss in the six months ended December 2010.
NZN