Customer Care Pays Dividends For AMI

AMI MEDIA RELEASE
Tuesday 13 November

Customer Care Pays Dividends For AMI

Leading wholly New Zealand-owned fire and general insurer, AMI Insurance, has marked its 75th anniversary with its most successful year ever.

The mutual company today announced a tax paid profit of $17.3 million for the year ending June 30 2001, up 14 percent on the previous year ($15.2 million). The profit was achieved on total premium income of $174.4 million ($169.8 million), while claims costs increased by 1% to $117.1 million. Investment income increased by 11% to $15.6 million and also made a strong contribution to profit.

This continues the growth trend over the last few years that has seen AMI achieve a steady improvement in market share.

“This result demonstrates that you can provide a high level of customer care in this industry and still achieve a strong profit result: customer care pays,” says John Balmforth, Chief Executive of AMI.

“Our customers tell us they want personal service through local branches, so that’s what we deliver. Besides our 68 branches, customers like the added flexibility of being able to contact us by telephone and through the internet.

“I also know our staff gain a great deal of satisfaction from assisting customers in the way they do and the attitude and enthusiasm of our people is one reason our customers rate us so highly in independent surveys.”

“And local service based on strong local knowledge not only delivers a high level of customer care - it also helps us manage risk more effectively.”

AMI adjusts its premiums to reflect the risk factors shown by claims experience. Premium changes are being kept below the level of inflation.

“The year’s good performance has boosted AMI’s reserves to $137 million, up 14%, and our solvency margin has risen to 79.9%, one of the highest in the industry. The financial strength of the company is evident. Furthermore, international rating agency AM Best have confirmed an A (Excellent) rating for our claims paying ability.”

John Balmforth says that while the events in the US on September 11 were outside the reporting period, AMI expects little affect from these events in the current year.

“AMI does not write business outside of New Zealand and therefore has not been affected directly. However the New Zealand market is already seeing higher reinsurance costs and these, together with flow on costs and reduced investments returns, will impact on the industry going forward,” he says.

AMI FIVE YEAR SUMMARY ($000)

1997 1998 1999 2000 2001
Written premiums $ 151.5 158.6 163.3 169.8 174.4
Tax paid profit $ 13.6 7.5 7.6 15.2 17.3
Cost of claims $ 111.6 111.1 115.5 115.9 117.1
Total assets $ 167.9 176.5 187.7 208.6 229.7
Solvency margin % 60.4 62.5 65.2 71.73 79.91

For further information:

John Balmforth
Chief Executive Officer
AMI Insurance
(03) 371-8311

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