Damages caused by Saturday morning's magnitude 7.0 quake in New Zealand have been estimated to reach $NZ2 billion, but Australian insurance companies claim to have reinsurances.

Insurance Australia Group Limited (ASX: IAG) head Mike Wilkins said. “At this stage it is too early to determine the extent of damage to our customers' property, but we expect it is likely to be significant.” Suncorp-Metway Limited (ASX: SUN) claimed a financial exposure to be limited to $47.3 million ($NZ60 million) because of its "conservative" reinsurance arrangements and the New Zealand statutory framework for household claims.

The New Zealand Earthquake Commission takes the first line of the insurance blanket. The commission will provide each affected household with an amount not exceeding $NZ100,000 per housing unit and $NZ20,000 for contents.

Household exposures beyond the cap amount are subject to private insurance arrangements. Commercial property risks are also covered through private insurance. Earthquakes are generally covered in standard property policies.

According to Axiome Equities analyst Brett le Mesurier, reinsurers Munich Re and Swiss Re would pay for most damages from the quake. The analyst warned of “pressure on reinsurance rates as the number of catastrophes increases.”

IAG shares closed at $3.48 and Suncorp stocks closed at $8.58.