Insurer boss surprised by response to quake report

Insurer boss surprised by response to quake report | Insurance Business

Insurer boss surprised by response to quake report
Vero CEO Gary Dransfield says he had hoped the independently commissioned report looking at the insurance response to the Canterbury earthquakes would stimulate discussion – and if the blanket coverage on mainstream media on Monday was anything to go by, he got his wish.

“We were really pleased and slightly surprised, but in a pleasant way, at the extent of the media interest in both the report and the views that that gave us a platform to put out,” Dransfield told Insurance Business.

The report, Four Years On: Insurance and the Canterbury Earthquakes, highlighted the inefficiencies of New Zealand’s dual insurance system and with the review of the EQC Act currently underway, Dransfield said the report’s release was well timed.

“It is timely and hopefully there’s the benefit of some good external analysis on which the industry can now piggy back.

“You can extrapolate the sort of numbers we talked about to the whole private industry contribution and use that to further stimulate the debate.”

While he stressed the motive behind the report being commissioned was by no means an EQC-bashing exercise, now was the time to plan a better response for the future should it be needed.

“We’ve said we think the claims management area in particular needs to be the focal point for the discussion around potential change but we agree with the EQC we need to reinvigorate that discussion and that review with the view to getting a conclusion.”

He said: “The heart of the question is what will produce the best outcomes possible for New Zealanders – individuals and businesses – should something like this happen again.”

The idea for the report, undertaken by Deloitte Access Economics, came following parent company Suncorp Group’s similar move after the 2011 Queensland floods.

“They did a similar piece of work to evaluate the economic impact of the Suncorp contribution in Queensland in 2011 so we thought there was a really good example within the group of doing a piece of work like that [where you can] take learnings out while they’re still fresh,” Dransfield said.

“As we were going along we could see that would give us a platform both to talk more about how the dual insurance model works for homeowners but also how strong local lead insurers like Vero in the commercial market were able to accelerate recovery.”

Dransfield said earlier that the feedback they had consistently received from Vero customers was that a more simple, efficient process was needed.

EQC CEO Ian Simpson told Newstalk ZB the report raised some good questions but was not an easy fix.

“Some people have drawn conclusions that that means it’s black or white - ie the insurer takes all the claims or EQC takes all the claims. I just think there’s a good conversation to be had here about how we establish a middle ground,” he said.

In reponse to the report, another key player, IAG, said while their efforts had so far concentrated on working collaboratively through the Insurance Council of New Zealand (ICNZ) they respected all contributions to the debate when the intent is to be solution focused.

IAG head of communications Craig Dowling said: “From IAG’s perspective, we are challenging ourselves to ‘walk in others’ shoes’, engage widely, listen and to stretch our thinking, as it would be arrogant to assume we have all the answers to the complex challenges that have emerged.

“We seek to demonstrate our leadership through actively engaging and building constructive relationships with experts in other areas, and with agencies involved in the recovery at community, central and local government levels.”

He said they envisaged contributing ‘something more formal in terms of insights based on this approach’ at a future date, adding: “At the moment our key focus remains on making progress for our customers.”

Read the full report here: Four Years On: Insurance and the Canterbury Earthquakes.