“Insurers have been working very hard to progress EQCover claims that are lodged through them and are resourced to scale.”
Those were the words of Toka Tū Ake EQC chief readiness and recovery officer Kate Tod (pictured) in response to comments that the New Zealand Crown entity’s EQCover model is leaving Kiwi insurers under immense pressure amid complex land damage claims that are far more difficult to process and settle.
An Insurance Business source, on condition of anonymity, recently told this publication: “Insurers are under extreme pressure because they are trying to do the Earthquake Commission’s job for them, as well as their own... Insurers nowadays act as agent for the Earthquake Commission, a situation which is extremely taxing and arguably conflicting.”
Under Toka Tū Ake EQC’s partnership model, participating insurers assess, manage, and settle entire residential claims spanning losses they cover and those insured by EQCover. Currently, nine private insurers are partnered with Toka Tū Ake EQC – AA Insurance, Chubb, FMG, Ando/Hollard, IAG, MAS, Vero, Tower, and QBE.
For the source, this set-up has been a “nightmare” for insurance providers and policyholders alike.
“The conflated manner EQC has disinformed and reinterpreted the EQC Act 1993 makes it near impossible for insurers to grapple with and attempt to settle land damage claims, which after all is the damage that principally occurs due to storm, flood, and landslides,” the source said. “Settlement of residential building damage claims is undoubtedly a breeze compared with residential land damage claims.
“Staff are expected to understand the EQC Act 1993 and also try to make sense of the 377-page EQC Assessment Manual and the 204-page EQC Claims Manual – Residential Land. They would hardly have any hope of understanding the Act and 581 pages of EQC material if it was all accurate and true – however, such is far from the case, adding to the insurers’ and claimants’ nightmares.”
The Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa did note previously that many of the more complex claims would take months, if not a year or more, to be finalised.
Responding to the above comments, Tod pointed to history and explained how the EQCover partnership model came to be.
She told Insurance Business: “Toka Tū Ake EQC works closely with New Zealand’s private insurers to provide a simplified and streamlined claims experience for customers. Since June 2021, insurers have managed EQCover claims on our behalf, providing homeowners with one point of contact for the natural hazards insurance claim.
“The model was introduced in response to customers’ experiences following the Canterbury earthquakes, where homeowners had to navigate two insurance processes, which was complicated and stressful for many. The partnership with insurers is customer-focussed, reduces complexity at a stressful time, and supports EQCover claims being processed fairly and as efficiently as possible.”
The chief readiness and recovery officer asserted that insurers and Toka Tū Ake EQC share common goals in making the process as simple and streamlined as it can be for the benefit of claimants.
“We know the recent weather events have been devastating for many homeowners across Aotearoa and are significant for the insurance industry,” Tod said. “Insurers have been working very hard to progress EQCover claims that are lodged through them and are resourced to scale.
“We provide support in the background with training and claims support for EQCover matters and assessment training as needed. We work closely with insurers to understand the pressures on them, and any additional support they might need to support our shared customers.”
According to Toka Tū Ake EQC, more than 14,300 EQCover claims have been lodged with its partner insurers over the past two years.
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