New treatment of earthquakes’ insurance in statistics

New treatment of Canterbury earthquakes’ insurance in statistics

Statistics New Zealand has issued an information paper revising how
insurance claims from the September 2010 and February 2011 Canterbury
earthquakes are treated in the national and international accounts.

The insurance will now be recorded in the capital account instead of the
current account.

Revised treatment of the Canterbury earthquakes’ insurance claims in New
Zealand’s international and national accounts is available on the
Statistics NZ website, www.stats.govt.nz.

In summary:

· Reinsurance and insurance claims from the Canterbury earthquakes will
now be recorded as capital transfers instead of current transfers.

· Consequently, the balance of payments statistics will no longer show
these flows in the current account balance. The headline estimate of
quarterly gross domestic product is not affected by the change.

· In the national accounts, statistics such as national income and
national saving will no longer be directly affected by these large
and exceptional insurance claims.

· This treatment means that New Zealand’s key economic statistics
better reflect our economic position, avoiding distortion from the
insurance claims.

· This approach was decided after careful analysis of internationally
recognised options endorsed by bodies including the United Nations
Organisation, International Monetary Fund (IMF), and World Bank.

· Following the September 2010 earthquake, Statistics NZ recorded
insurance as current transfers, in line with existing IMF practice.
Given the scale of the events it is now more appropriate to treat the
insurance flows as capital transfers instead of current transfers.

We are releasing this information ahead of our Balance of Payments and
International Investment Position release on Wednesday, 22 June, to allow
time to understand the treatment and impact.

Colin Lynch
Deputy Government Statistician

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