One year later: Christchurch update

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One year later: Christchurch update

Insurer-funded rebuilding process will include building codes to help shelter the city from future catastrophes.

Suzanne Sharma on February 22, 2012

It’s been one year since the 6.1- magnitude Christchurch earthquake, which killed 185 people, destroyed thousands of homes and buildings, and caused $25 billion in damage, according to government estimates. And as residents gathered in Latimer Square to mark the anniversary of the disaster Wednesday, the insurance industry continued to do its part by helping all those affected.

“Today is a reminder of the devastation caused by the Christchurch earthquake,” a Lloyd’s spokesperson told Canadian Insurance Top Broker. “Through our commitment to pay all valid claims, Lloyd’s is playing an important role in helping the Christchurch community and businesses rebuild after this disaster.”

Sharon Ludlow, CEO of Swiss Re Canada, agreed the devastating earthquake demonstrated the vital role the insurance industry has to play in helping communities rebuild when a natural disaster of this magnitude strikes.

“The city of Christchurch has been able to begin the long rebuilding process with funds from the insurance industry with many buildings being replaced by those constructed under enforced building codes, helping to make the city safer should a future event occur,” Ludlow told Canadian Insurance Top Broker February 22.

In New Zealand, between 1970 and 2011, there have been three earthquakes and 80% of the total losses were covered by insurance, according to Ludlow. This is due to the fact that residential earthquake insurance is mandatory and is administered through the Earthquake Commission. The figure of 80% is in stark contrast to the US where the same time period saw 13 earthquakes and only 38% of losses were insured.

Ludlow also compared the Christchurch disaster to countries like Italy and Turkey, which have also been recently hit by earthquakes. In those countries, individuals or corporations have had to shoulder much of the financial responsibility for rebuilding following a disaster.

Long Road Ahead

In Christchurch, about 1,400 buildings were irreparably damaged during the quake and subsequent aftershocks. Hundreds of wrecked buildings downtown are still waiting to be torn down so reconstruction can begin.

However, the rebuilding process will be a long and tedious one. Basic downtown infrastructure like the sewerage system have not yet been repaired, and vital decisions about where to locate major structures in a new-look city – including a proposed sports stadium, library and conference centre – remain incomplete.

Christchurch developer Angus McFarlane said he expects the commercial core of the city will take 10 years to rebuild and will contain just 30% of the retail and office space it did before the quake.

Mayor Bob Parker said the city centre will be more condensed and won’t have the tall office buildings it once did. But he said it will be more dynamic, livable and green.

Post-quake, businesses have been remarkably resilient, according to Peter Townsend, chief executive of the Canterbury Employers’ Chamber of Commerce. Business receipts are at more than 95% of the pre-quake levels. Some parts of the city that have picked up the slack are booming, he said.

With files from Nick Perry, The Associated Press