The sorrows of Clal Insurance’s reinsurance business down under just don’t end. After taking a bath in Australia’s floodwaters followed by a pounding from Cyclone Yasi, now it is likely to be shaken by the deadly earthquake that hit New Zealand.
Dozens were killed and an unknown number of others remain trapped beneath rubble in Christchurch after the 6.3-magnitude temblor struck at lunchtime yesterday. The local press has been calling it the worst natural disaster to hit New Zealand in 80 years, since a 1931 quake killed 256 people in the North Island city of Napier. Not only have buildings crumbled and roads collapsed; parts of the city, Brighton and Bexley, have been inundated by floods.
“We may well be witnessing New Zealand’s darkest day .... The death toll I have at the moment is 65 and that may rise,” New Zealand Prime Minister John Key told the press.
Ten years ago Clal Insurance acquired Broadgate Underwriting, a UK-based reinsurance firm that is a member of the Lloyd’s syndicate. It turns out that Broadgate is exposed to the New Zealand disaster as well.
It is far too soon to estimate the extent of potential claims that Broadgate could face there.
Clal Insurance has yet to publish its financial statement for 2010. Market sources postulate that its reinsurance business caused the Israeli company heavy losses − more than NIS 100 million in the last year.
For the first nine months of 2010 Clal Insurance posted a pretax loss of NIS 90 million because of its reinsurance exposure to natural disasters. One was the gigantic earthquake that shook Chile in last February. There were also wildfires in Australia, and then there was the quake in New Zealand in September.
The various disasters in 2010 will probably wipe out half of all the profit Clal Insurance has accrued from Broadgate in the 10 years since it bought the company from the French group Groupama in 2001. From then through 2009, Broadgate contributed NIS 210 million in profit to Clal Insurance. Clal Insurance, which belongs to Nochi Dankner’s IDB group (though he’s been trying to sell it), is expected to file its financial statement for the fourth quarter of 2010 and for the year in mid-March.
One of the side effects of yesterday’s earthquake, by the way, was that massive chunks of ice reportedly calved off the Tasman Glacier, the longest ice river in the country, in the southern Alps. The ice fell into Terminal Lake, which is about 200 kilometers from Christchurch, creating bergs. New Zealand media report that some 30 million tons of ice are believed to have fallen off the glacier and dropped into the lake.
Want to enjoy 'Zen' reading - with no ads and just the article? Subscribe todaySubscribe now