Insurance Liability Valuation 30 June 2018

EQC commissioned Melville Jessup Weaver to carry out this report, which provides information about EQC’s insurance liabilities and reinsurance recoveries for use in the financial reports as at 30 June 2018 and the development of EQC’s Canterbury and Kaikōura earthquakes claim costs since 31 December 2017.

EQC is providing this report to the public in the interests of transparency and has considered the public interest in deciding whether to withhold any of the information contained in the report. EQC has decided it is necessary to withhold the following information under the Official Information Act 1982:

• names of certain individuals under section 9(2)(a) to protect privacy;
• information under section 9(2)(h) to maintain legal privilege;
• information under section 9(2)(j) to carry on, without prejudice or disadvantage, negotiations.

At a gross level, the estimated ultimate costs from the Canterbury earthquake sequence have risen by $272m to $11,044m compared to the December 2017 ILVR.  On a net basis the ultimate cost is $6,881m, an increase of $218m. The difference between the net and gross variances is due to anticipated reinsurance receipts increasing by $54m (which broadly corresponds to the increased allowance for the Darfield event). The Kaikōura ultimate liability (undiscounted) has increased by $6m to $616m compared to December 2017. The increase is primarily due to an increase in liabilities for building claims, in addition to a smaller increase in CHE offset by a reduction in the land liability.

---