Major insurer Insurance Australia Group (IAG) expects the final cost of Canterbury earthquake claims to be as much as $4 billion.
Liquefaction in the Christchurch red zone. Photo: RNZ / Diego Opatowski
IAG's previous estimate of total claim costs was $3.25b but it now says it expects that to increase by between $750 million and $1 billion.
The figure had been revised because of higher-than-forecast repair and rebuild costs; the continued notification of new household claims which exceeded the Earthquake Commission's $100,000 limit; and a series of adverse court judgements that have impacted the insurance industry, the company said.
A formal assessment of its costs position would be finalised in conjunction with its 2015 first half results, due for release on 18 February.