News in Brief: Record-breaking Christchurch insurance payout

News in Brief: Record-breaking Christchurch insurance payout | Insurance Business

News in Brief: Record-breaking Christchurch insurance payout
Record-breaking Christchurch insurance payout
Settlement for the biggest insurance payout in New Zealand history, between Christchurch City Council and its insurers Civic Assurance, LAPP (Local Authority Protection Programme) and Civic Assurance’s principal reinsurers, is due next month.

The full and final settlement amount of $635 million was agreed upon and announced at the end of last year and includes all of the above ground assets and business interruption losses.
The amount was in addition to the $201 million already paid by LAPP in 2012 for below-ground assets and the EQC settlement of $59.4 million.

Peter Gudsell, the Council’s chief financial officer, said the Council was delighted to have reached a conditional settlement which had come after lengthy negotiations.

“The actual settlement will take place in February when the Council is to receive payment in full,” he said.

“Achieving agreement means the Council will not be reliant upon progress payments from the insurer as and when agreed reinstatement work is undertaken. This gives the Council greater flexibility and certainty in terms of what and when assets can be repaired or replaced.”

CEO of Civic Assurance, Tim Sole, said he was glad to avoid going to court.

“All concerned wanted to see mediation succeed and Civic believe the Council have secured a very good settlement with Civic’s assistance.

“It provides the Council with an upfront lump sum payment, avoids the prospect of costly and prolonged litigation, and enables the City, Civic and its reinsurers to move on.”
NZ natural catastrophe cost total
Floods, storms, cyclones and tornadoes resulted in nearly 2,000 insurance claims last year which cost the industry $115 million, ICNZ figures have revealed.

The major insurance events were:

* Flooding and storms in the lower North Island, including Whanganui in June, led to the highest insurance claims of $41.5 million.

* The June flooding in Otago which saw $28 million in claims filed.

* The tornado that hit Mt Maunganui in May resulted in $1.2 million in commercial damage and almost $800,000 in domestic damage.

* Cyclone Pam in March cost insurers $1.4 million.

While the total of $115 million was significant, figures from previous years were higher. In 2014 disaster events cost the industry $152.8 million and in 2013 insurers paid out $206.4 million.
New provider for CBL
CBL Insurance has signed up with SSP to implement its systems into CBL’s operation.

The credit surety and financial risk insurance provider now has SSP Pure Insurance and E5 Workflow which CBL said will provide much greater efficiencies.

SSP’s general manager Asia Pacific, Paul Miller, said the company had taken time to understand the strict high level requirements of CBL’s business which included processing of high value multi-currency bordereaux, automating commission structures, claims processing and access to information.

“This understanding has enabled SSP to customise the right solution for the client,” Miller said.

CBL’s chief financial officer Carden Mulholland agreed. “It will enable us to automate the processing of highly complex charging and commission structures, provide enhanced efficiencies, and provide the management team with information that will enable them to make high quality informed decisions on the operational side of the business.”