Suncorp New Zealand chief executive Jimmy Higgins (pictured), whose camp received more than 30,000 claims from the Auckland Anniversary floods and Cyclone Gabrielle, has lessons he’s carrying forward into 2024 and beyond. Here Higgins talks about the main takeaways from what has been a record-breaking period.
According to the CEO, the geographical spread and severity of the floods and cyclone “had not tested us as much” since the Canterbury earthquakes – making way for learning following the challenges.
“When events of this size happen, you need to be able to scale up very quickly,” Higgins told Insurance Business. “Challenges include people capacity, building resource capacity, supply chain bottlenecks, and of course the need to understand what we are dealing with.
“By far the biggest concerns was customers that didn’t have a home or some of the basic essentials that we take for granted. Our employees dealt with some dreadful stories from customers who lost everything, and in some cases their loved ones. So, the emotional battle ahead of us far outweighed the logistical demands.”
The volume of claims and the need for solutions, he highlighted, meant the insurer had to adapt and continue to implement changes as it was learning along the way.
“From a customer care perspective, we’ve learnt a lot this year on the needs of those most vulnerable when disaster strikes,” Higgins said. “Prior to these events, we had an established customer vulnerability programme operating, and our whole workforce trained to understand and be able to identify vulnerability in our customer base, with our customer teams equipped to refer these customers on to the appropriate support.
“Throughout the weather events this year, though, we have introduced three levels of customer vulnerability support, including what we call CEV Plus and CEV Extreme support, through which we’ve offered increasing levels of well-being and other support for more than 1,100 customers we identified as needing it.”
Across the two events, the gross cost of the claims received by Suncorp NZ amounts to more than $1 billion, according to Higgins, with the combination of the floods and the cyclone being the biggest non-seismic natural disaster in New Zealand’s history cost-wise.
“We were lucky in that we very quickly had support from Suncorp Group, with 100 people in Brisbane taking calls and settling less complex claims, and 20 additional property assessors on the ground here every two weeks on a rotating basis for the first few months,” the chief executive told Insurance Business.
“These operators had just come off supporting Suncorp’s response to the east coast flooding in Australia, so they were very familiar with the disaster claims process, which provided really valuable expertise we could draw on.”
Higgins noted that, from a business perspective, the key takeaway is that New Zealand is no longer seen by global reinsurers as low risk.
“This is important – because of the increased frequency and extent of impact of the natural hazard events impacting this country over the past three years, our reinsurers now have an increased level of uncertainty around natural hazard risk here,” the CEO said.
“Seismic risk, earthquake risk used to be seen as New Zealand’s only primary risk for reinsurers, but they now view flooding as a significant risk also, and they are pricing for this, which is having an impact on customer premiums.”
There is one lesson, however, that Higgins put an emphasis on.
“A lesson that we should all take from these events is that they will happen again unless we take the impact of climate change seriously,” he said. “We need to stop building in high-risk areas. We need better flood prevention and protection, better infrastructure to cope with a one-in-100-year flood, better building standards that mitigate repair costs, and support councils that decline development applications because of unacceptable risk to flood (and therefore life).
“We need central government to take a 30- to 50-year view of hazard risks and invest appropriately, rather than a three-year political cycle view. Finally, we must ensure that in three to five years’ time we don’t forget what happened this year – governments come and go, but buildings and homes are forever.”
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