Sharechat Logo

China Taiping Insurance halts new cover in quake-prone Wellington, Canterbury

Thursday 31st May 2012

Text too small?

China Taiping Insurance (NZ), the local unit of the Hong Kong exchange-listed insurer, has told brokers it won't underwrite any new business in Wellington or Canterbury as it clamps down on its criteria at the behest of reinsurers.

The insurer will "further tighten up the underwriting on our business" at the request of reinsurers, releasing a list of new guidelines for all new and renewed business, chief operating officer Peter Lam said in a letter to brokers. The new guidelines will apply to all policies from July 1.

The new rules include limiting the maximum sum insured to $6 million for any one risk, no new business in Wellington and Canterbury, no insurance for buildings built before 1950, no business for heritage buildings and buildings erected after 1982 must be support by a valuation report for replacement value.

The letter was released by Labour Party MP Lianne Dalziel, who said that China Taiping has a significant share of New Zealand-Chinese business, even if it isn't exposed to the local market to the same extent as other general insurers.

China Taiping had $5.1 million in net premium revenue in the 2010 calendar year, posting a profit of $719,000, according to the latest financial statements lodged with the Companies Office.

The insurer gets its reinsurance from a related company, Taiping Reinsurance.

The Hong Kong Exchange-listed shares of parent China Taiping Insurance Holdings fell 0.8 percent to HK$12.98, and have dropped 8.3 percent this year.

Earlier this month, the Reserve Bank said it expects reinsurance premiums will rise this year as global firms look to recoup the losses incurred from the Canterbury quakes, Japanese tsunami, Australian storms and Thailand floods. The bank said a large proportion of general insurers need to renew their reinsurance contracts for a July 1 start date.

BusinessDesk.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Mild weather saps Vector's June-qtr volumes
NZ dollar gains as dovish Fed comments point to 50-bps US cut
19th July 2019 Morning Report
RBNZ says no change in approach on Resolution Life's AMP purchase
MARKET CLOSE: NZX50 hits record as yield stocks remain in vogue
NZ dollar mixed after strong Australian employment data
Energy efficiency key to lowering cost of renewables push - EECA
Paper recycling costs rising 35% as export markets collapse
First Union leading rivals for biggest average pay claims, says bargaining firm
Fonterra to go coal-free 11 years ahead of schedule

IRG See IRG research reports