Insurance Council of New Zealand says quake aftershocks may cause long-term concerns about insurability

The Insurance Council of New Zealand (ICNZ) has expressed concern that the long-term effect of continuing earthquake aftershocks in the Christchurch area may eventually prompt insurers to re-examine whether earthquakes in the area are insurable.
The ICNZ made the observation in a statement giving the estimate of the economic impact of the June 2011 quakes on the insurance industry.
The industry estimates it will pay at least NZ$10 billion (CDN $7.96 billion) into the Canterbury economy and the rebuilding of Canterbury and Christchurch generally. However, over a hundred extra commercial buildings were destroyed in the latest quakes and costs will rise. Many buildings already under repair were again destroyed or damaged again by the aftershock.
“The insurance industry has indicated that the continued aftershocks in Canterbury are being viewed with increasing concern by reinsurers and international insurers,” the ICNZ said in a release. “The aftershocks raise the level of risk seen in New Zealand and may have a significant impact on insurance and reinsurance policies in the future.”
The long-term impact may see increases in premiums and excesses, or even a questioning of the level of insurability for earthquakes that New Zealand receives, ICNZ says.
“The insurance industry… says that the future is now being re-assessed by reinsurers and insurers and there are likely to be long-term and significant changes to insurance in New Zealand when it comes to the writing of policies and covering of risks like earthquake, ICNZ says.
The council further observed earthquake protection for the region might ultimately be determined internationally. “New Zealand’s earthquake insurance future will be decided by reinsurers’ in boardrooms on the other side of the world,” ICNZ says.