Insurers hit out at Erin Brockovich

Insurers hit out at Erin Brockovich | Insurance Business New Zealand

Insurers hit out at Erin Brockovich
Image: Gage Skidmore

Consumer rights activist Erin Brockovich’s recent comments in Christchurch have riled many professionals in the insurance industry.

She had much to say after travelling throughout the Canterbury region from Arthur’s Pass in the Selwyn district to the seaside suburb of Sumner and visiting the homes of people still trying to settle their claims and repair their homes.

“It’s been too long. Six years is too long,” she said.

“To see, six years into this, what hasn’t been done and what hasn’t changed astounded me.

“I’ve never seen a situation, and we’ve lived through big earthquakes, six years later… so much has still not been taken care of.”

She added that financial gain for insurers is the cause for the claims process dragging out.

“At the end of the day these are huge payouts. It’s the root cause for why we see, in most of these situations, big delays,” she said.

“I hope insurance companies continue to get the message: this is ridiculous.”

However, when Insurance Business reached out to the area’s insurance professionals for their reaction, they told a very different story.

“You could not print what I think of her statements!” said Margaret Wallace, chartered loss adjustor and director of Crawford & Company. “I can say hand on heart that I have never dealt with a claim in Christchurch where insurers are delaying settlement in an effort to save money.

“Many of the delays in my experience are caused by the insured not being prepared to accept the scope of the repairs.

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“Unfortunately, there is a misconception that insurers are out to take advantage of the insured. This is not helped by the media who never report ‘good news stories’.”

Peter Harris, managing director for CBL Insurance Group, was of the opinion that the slow progress in Christchurch involves the ‘disconnect’ between the performance of insurers and the EQC.

“All insurers know that paying claims quickly saves money, not the other way around,” he said. “The delays with one particular insurer in paying claims were not so much about saving money but probably more to do with not admitting the levels of reserving they should be providing for in case it affected their survival with IPSA and the Reserve Bank at the time.”

Myles Noble, Crombie Lockwood head of insurer relationships and broker claims, commented that Brockovich’s statements are “remarkably shallow”.

“She clearly had no appreciation of the land issues involved, nor the EQC’s role, unless of course she chose to ignore them in the interests of more inflammatory media coverage. I think superficial sums up her observations,” he said.

According to Insurance Council of New Zealand (ICNZ) CEO Tim Grafton, her comments were “ill informed” and “wrong”.

“Insurers want claims settled as soon as possible because unsettled claims mean unhappy customers, brand and reputational damage and ongoing liability on balance sheets,” he said.

“There is no foundation to the fallacious allegation that insurers seek to delay claims.

“The reasons for the delays in Canterbury have largely been due to issues beyond the control of insurers.”

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