The Natural Hazards Commission Toka Tū Ake (NHC) will increase its reinsurance protection to $10.3 billion from 1 June 2025, up from $9.15 billion the year prior. The reinsurance package includes $225 million from a catastrophe bond arranged in 2023. If disaster costs rise above $2.2 billion, the scheme enables access to extra funding to meet claims.
Support Homeowners at Critical Times
Reinsurance, often described as “insurance for insurers,” plays a critical role in enabling the NHC to provide financial protection for homeowners.
Tina Mitchell, Chief Executive of the NHC, explains: “One way we ensure there is funding available to pay claims for natural hazards damage is by purchasing reinsurance – insurance for insurers.”
The system is funded through levies paid by all insured homeowners across New Zealand. According to Mitchell, “All insured homeowners across New Zealand contribute levies to the scheme. We use a proportion of those levies to purchase reinsurance cover at a national level.”
International Market Confidence Built on Science and Transparency
New Zealand’s reinsurance programme enjoys strong support from international markets, largely due to the NHC’s emphasis on science-based risk modelling and transparency.
“The scheme is held in very high regard globally,” Mitchell says. “Our long-term investment in research and modelling means we can give reinsurers a transparent understanding of the risks they are insuring.”
The high standing has allowed New Zealand to secure large financial backing, even in a competitive and cautious global reinsurance market. It’s not just the risk data that matters—Mitchell highlights the country’s broader approach to resilience: “International markets also value the scheme’s commitment to community resilience.”
Science-Based Planning Enables Long-Term Resilience
The reinsurance strategy is part of a larger vision for community resilience, in which science and research inform national decision-making. The gathered data influences everything from building regulations to the location of new developments.
“By funding science and research, then translating that into insights that can be used by decision-makers, we are supporting better building standards, decisions on where new homes are built and government planning,” Mitchell says.
Reinsurance in Action
New Zealand’s reinsurance programme has previously proved critical. Following the Canterbury earthquakes, around $5 billion in disaster-related costs were covered by reinsurers, offering a real-world example of how the system functions under pressure.
Reflecting on the country’s ongoing exposure to natural threats, Mitchell notes, “We can’t change the natural hazards we live with, but we can be prepared. Ensuring we have access to the right financial support provides peace of mind for New Zealand homeowners.”
The NHC supports disaster recovery through home and residential land insurance, linked to fire insurance policies and sustained by the Natural Hazards Insurance Levy.