Church Property Trustees

Earthquake Recovery Programme 

It has been a long 14 years but the last of the earthquake repair projects has been completed [St Paul's, Glenmark-Waikari] and CPT staff are working through final administrative matters with projects and a few 'tail' claims from a small number of parishes regarding repair issues.  These will be fully addressed shortly, and CTP will then be able to advise that no further claims will be considered. At that point, a final reconciliation can be made, and any remaining surplus insurance funds distributed to ministry units. 

The final distribution is likely late in 2025 and will be smaller than the first tranche as it is funds held back from the first payment to cover any late costs.

Earthquake Prone Buildings [EPB]

A big thank you to the approximately 20 ministry units who are working with CPT to address strengthening or sale of earthquake prone buildings. Whilst many of these buildings have not yet gone through the Territorial Authority process and become 'officially' EPB, the insurers will only cover these for indemnity value [i.e., depreciated].  Experience with the 2010/11 earthquakes shows us that this level of cover is insufficient if the ministry unit wishes to repair to the original standard of the building following possible damage.

The government has embarked on a review of EPB rules and have extended timeframes by four years as this review is undertaken. The CPT Board policy remains that ministry units continue to progress strengthening or divesting of earthquake prone buildings as a matter of priority and irrespective of regulatory deadlines.

Insurance

CPT staff are very aware, both personally and within the Diocese, of the financial difficulties being felt from ever-increasing insurance premiums. 

The insurance market has changed dramatically since the 2010/11 Canterbury earthquakes. Some of the factors include:

• Increased awareness of the real risk of earthquake, both through the experience of the Canterbury and Kaikoura events and work being undertaken on the Alpine Fault [AF8] and Hikurangi Subduction Zone risks.

• Following the Japanese tsunami, an increased awareness of coastal inundation risks.

• Development of modelling with respect to potential sea level rises.

• Development of more stringent engineering requirements for earthquake resilience of buildings.

• High construction cost inflation causing the insured value to rise at an unprecedented rate – for example, the insured value of the CPT property portfolio has risen from $348 million in 2017 to $578 million for the 2024 renewal.

• Insurers are now requiring more information on each building to identify risks and amending cover accordingly – for example only offering Indemnity Value cover to buildings they deem to be earthquake prone. Indemnity Value [IV] is a value lower than Replacement Value [RV]. It can broadly be defined as the depreciated value of the asset.

• Withdrawal of a number of insurers from the New Zealand market.

There is little doubt that insurance costs will continue to increase and that ministry units will find these costs increasingly difficult to meet. At Synod September 2024, the Anglican Diocese of Christchurch will debate two Motions addressing the future affordability of insurance. CPT will work closely with Standing Committee to implement any resolution that Synod may reach on this important and challenging matter.