470 (2024). Hon Dr Duncan Webb to the Associate Minister of Finance

470 (2024). Hon Dr Duncan Webb to the Associate Minister of Finance: Has there been any modelling done on the likely cost to Toka Tū Ake EQC if there was a significant seismic event in the Hikurangi Subduction Zone; if so what is the likely cost, or range of cost?

Hon David Seymour: I have been advised that modelling on the likely cost to the Earthquake Commission of a significant seismic event on the Hikurangi Subduction Zone has been undertaken. Latest modelling estimates the direct building cost to the Earthquake Commission for an approximately magnitude 8.6 rupture in the Hikurangi Subduction Zone to have a median value of approximately $10.4b. In general, an extra 18% is added to account for estimated claims handling expenses. I am advised that there is a large amount of uncertainty in the modelling, so the true cost could be expected to fall somewhere within ±50% of this median estimate, but depending on circumstance (not least the magnitude of the event), the true cost may be higher or lower. I am advised that in the case of a large Hikurangi Subduction Zone event, significant losses from tsunami are also expected, and not included in this modelling. I have also been advised that the modelled losses are only for EQC’s building exposures, but not land.