Credit Suisse sees capital quake insurance losses ‘well below’ $US1b

Just 35 buildings sustained damage, says city's mayor.

The 6.5-magnitude earthquake in Cook Strait last Sunday is not expected to lead to big insurance losses, which global financial services firm Credit Suisse expecting it to come in below $US1 billion.

Credit Suisse has told investors in its insurance-linked strategies fund, CS IRIS Low Volatility Plus Fund, that the quake was further away from dense populations and lacked the ground acceleration of the 2011 Canterbury shock, according to fund investor DCG IRIS, a unit of financial services firm Dexion Capital.

"Given these factors we expect significantly smaller insured losses from this event compared to the New Zealand earthquakes from 2010 and 2011," DCG IRIS says in a note.

"Current estimates of insured losses are well below $1 billion and based on these estimates we do not expect any impact on the IRIS Low Volatility Plus Fund."

Just 35 buildings in New Zealand's capital city have sustained damage from the Sunday quake, most of which is seen as largely minor, according to mayor Celia Wade-Brown.

Some local insurers have stopped writing new business in the Wellington and Marlborough regions in response to the quakes, though they do not anticipate the event will lead to global reinsurers hiking premiums because of the limited damage.

The Dexion unit had net assets of £60.18 million as at May 31 and 4 percent of its investments were exposed to Australasian earthquakes.

July 1 was the renewal of several programmes in Australia and New Zealand, which Dexion said in its May update were under review and that the investment team was looking for opportunities in the region.

(BusinessDesk)