The Insurance Australia Group Ltd, the nation’s largest home and auto insurer, has announced that it will be acquiring New Zealand’s AMI Ltd, one of the largest property insurers in New Zealand. The $286 million deal is already underway, but will require the approval of New Zealand’s insurance regulators before Insurance Australia can begin taking over policies. This is good news for those affected by the devastating earthquake that struck New Zealand in February of this year, as they will soon be able to enjoy policies from a larger, more capable insurance group.
New Zealand’s Canterbury County was most affected by the quake earlier this year. The city of Christchurch, in particular, saw widespread damage that cost the country’s insurance industry more than $3 billion. In the wake of the quake, many of the nation’s insurers fled, leaving the government to handle the financial burden of the damage. Insurance Australia will not be taking over claims from the event, as the government has already reached a deal with several homeowners regarding the matter.
AMI has been waiting for an injection of funds from the government for several months. The government, however, has been slow to act due to the severity and nature of the disaster. Insurance Australia decided to step in due to its ties in New Zealand’s business world. If the nation continued to suffer in the wake of the catastrophe, the insurance industry would have suffered a grievous blow that would have extended to the industry in Australia.