Southern Response, the Crown-owned insurer established to handle Canterbury earthquake claims, plans to significantly reduce its workforce as it nears the end of its operational mandate.
By June 2025, the agency expects to cut its staff from 24 roles to between eight and nine, reflecting the declining number of active claims.
Speaking before Parliament’s Finance and Expenditure Committee, Southern Response chairman Alister James said that the organisation was designed for a specific purpose and timeline.
Southern Response was created after AMI Insurance’s collapse following the 2010 and 2011 Canterbury earthquakes, when the insurer’s lack of reinsurance left it unable to meet claim obligations.
The government intervened, setting up Southern Response to manage pre-April 2012 earthquake claims from AMI policyholders.
James reported that Southern Response has resolved 9,019 claims, representing 96% of eligible cases.
The remaining claims are being addressed through a partnership with the Natural Hazards Commission (NHC), formerly known as the Earthquake Commission (EQC).
“In terms of our duration, we continue but on a basis of diminishing in size and we’ll see significant downsizing in the coming year,” James said, as reported by Interest.co.nz.
He added that the grant package is expected to conclude by mid-2025.
However, chief executive Casey Hurren noted that liabilities may persist for years.
Actuarial estimates suggest new claims could emerge as late as 2029, nearly 20 years after the February 2011 Christchurch earthquake.
Hurren said that the agency and the government are working to determine a practical endpoint for Southern Response’s operations.
“So, it’s not saying that yes, everything will stop in terms of liabilities. What we’re working towards is, when’s a sensible point in time where it doesn’t make any sense for our operations to continue to exist,” he said, as reported by Interest.co.nz.
The agency remains reliant on Crown indemnities to operate.
David Seymour, minister responsible for Southern Response and the NHC, has emphasised the need for efficiency as the insurer winds down.
In a May 2024 letter to James, Seymour warned that any ongoing government funding would face “enhanced scrutiny” and highlighted the importance of returning surplus capital to the Crown.
Southern Response has faced legal and public challenges in the past. In 2019, the High Court ruled that the insurer had engaged in misleading and deceptive practices concerning earthquake insurance payouts.
