Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


AMI weathers the storms

AMI weathers the storms

Leading wholly New Zealand-owned fire and general insurer, AMI Insurance, has marked a difficult year for the insurance industry with a very solid result.

The mutual company today announced a tax paid profit of $12.1 million for the year ending June 30 2002, compared to a profit of $17.4 in 2001. The profit was achieved on increased revenue from premiums of $185.0 million ($174 million), while claims costs also increased by 10% to $129.8 million. Investment income dipped from $15.6 million to $11.0 million, but still made a strong contribution to profit.

This is an excellent result when the challenges that the insurance industry faced in 2001-2002 are considered. The country experienced a series of significant weather events that caused substantial damage to property and cost to the industry. The flow-on effects of the September 11 2001 events in the USA have also impacted the industry driving up reinsurance costs and weakening investment returns.

“Despite these pressures AMI has achieved an excellent result. The company’s underlying position is very strong. We have continued our growth trend over the last few years that has seen AMI achieve a steady improvement in market share, reflected in increased premium income and policy numbers. The total assets of the company now stand at a record $250 million,” says John Balmforth, chief executive.

“The challenges of 2002, especially the weather-related events, made significant demands on the whole industry and AMI was no exception. However, we held firmly to our philosophy of customer care and focus on delivery of service. I’m very proud of the fact that our staff were out there, on location, helping customers secure their properties, facilitate repairs and make alternative arrangements for their families. That’s customer care in action and that’s what this company is known for.

At the end of the day excellent customer care arises from the commitment and motivation of staff, and they rose to the occasion. The feedback from customers has been tremendous,” says Mr Balmforth.

“These events also highlighted the real advantage to our customers of our network of branches throughout urban and especially in provincial New Zealand, where so many other companies and organisations have been closing them down. It meant that we had people “on the ground” and able to respond. With 68 branches, 27 agencies and two call centres we are able to provide 24 hour coverage in virtually every community.

“During the year we increased staffing levels in line with business growth. We are very pleased to have been able to do this. Not only are we pleased to offer positions in an industry where some companies are reducing staff, but it enables us to back our products and their delivery with skilled and capable people. In addition, the efficiency of the organisation is demonstrated by an improvement in the management expense ratio.

“It is important for policyholders that the company is strong and stable. These two characteristics have been highlighted this year. The true measure of an organisation is how it responds when under pressure, not just in the good times. With each of the challenges during the year the response has been solid and effective. Furthermore, as a New Zealand-owned mutual company the profit from the year will be retained in the business to build security for policyholders.”

“The year’s good performance has boosted AMI’s reserves from $137 million to $150 million, up almost 10%, and our solvency margin has risen from 80% to 82%, one of the highest in the industry. The financial strength of the company is evident. Furthermore, international rating agency AM Best have confirmed their A (Excellent) rating for our claims paying ability,” says Mr Balmforth.

AMI has introduced further innovations to the market during the last year. Notably a new rental property policy was introduced to cover landlord customers and a new two-product “multi-saver” discount package was developed to acknowledge customer loyalty and return benefits to members.

The board of AMI continues to adopt a best practice approach to corporate governance. In light of events in the USA during the year AMI reviewed aspects of its governance processes. AMI is benchmarked against the best practice recommendations of the New Zealand Institute of Directors and professional advice. In that respect, the board has decided to accept only audit and tax advice from its auditors and other business advice, when required, from other sources. It is believed this offers the most objective approach possible.

1998 1999 2000 2001 2002
Written premiums $ 158.6 163.3 169.8 174.4 185.2
Tax paid profit $ 7.5 7.6 15.2 17.3 12.1
Cost of claims $ 111.1 115.5 115.9 117.1 129.8
Total assets $ 176.5 187.7 208.6 229.7 250.8
Solvency margin % 62.5 65.2 71.7 79.9 81.9

© Scoop Media

Business Headlines | Sci-Tech Headlines


BusinessDesk: Body massages and Uber are in, DVDs are out, says Stats NZ

Statistics New Zealand has rejigged the consumers price index basket in its latest three-year review, adding body massages, Airbnb and Uber and removing DVD and Blu-Ray players…More>>


StuffMe: Commerce Commission Welcomes Dismissal Of Merger Appeal

In a summary of their judgment released today, Justice Dobson and lay member Professor Martin Richardson dismissed the appellants’ process criticisms and found the Commission was entitled to place significant weight on the prospect of reduced quality of the products produced by the merged entity. More>>


Digital Futures: New Chief Technology Officer Role Created

Communications Minister Clare Curran has called for expressions of interest for the new role of Chief Technology Officer position to help drive a forward-looking digital agenda for New Zealand. More>>

Real Estate: NZ house sales slump in December but prices still firm

The number of property sales across New Zealand slumped 10 percent in December from a year earlier but prices continued to lift, according to the Real Estate Institute. More >>


Dry: Beef + Lamb Launches Drought Resources

The resources include a fact sheet outlining strategies to manage and mitigate the effects of drought, coping with stress on the farm and advice on feed requirements and animal welfare during the dry period. More>>


InternetNZ: Net Neutrality Failure In US "Will Hurt All Users"

InternetNZ Chief Executive Jordan Carter has condemned the decision by the United States communications regulator to undo 2015 open Internet rules, warning that all Internet users will end up worse off as a result. More>>