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100 Fatality Claims from the Christchurch Earthquake

100 Fatality Claims from the Christchurch Earthquake

Latest insurance statistics from the Christchurch earthquake show that the ACC have made payments to individuals of $9.23m while the life insurance industry has made payments in excess of $18.5m.

The latest Quarterly Statistics from the ISI for the period ending 30 September 2011 show that ISI members have paid out more than $18.5m in claims directly resulting from the 22 February Christchurch earthquake, comprising of:
• $17.56m for 100 death claims (average $176,000 per claim);
• $0.139m for 13 trauma and permanent disability claims (average $10,692 per claim);
• $0.203m in income protection claims; and,
• $0.623m in redundancy claims.

It needs to be noted that 100 death claims does not necessarily mean that 100 individual people were insured – it is highly likely that some of the earthquake victims had more than one insurance policy, such as a life policy to cover their outstanding mortgage and a separate funeral policy (although the ISI cannot confirm this as the Association does not collect personal details for each claim).

ISI is also unable to identify the exact number of income protection and redundancy claims that have been accepted (again, due to a lack of personal details, but combined with the fact that some claims overlapped multiple reporting periods). However, it is expected that total claims peaked at around 25 for income protection and 220 for redundancy.

In comparison to the industry, data obtained from ACC (as at 10 September 2011) confirmed that the Agency had paid out $9.23m for 8,071 claims at an average of $1,144 per claim. Of this amount:
• around $2.7m was paid out in death grants for 177 claims at an average of $15,265 per claim, including $0.837m in funeral grants for 174 claims ($4,810 per claim) and $0.584m in survivor grants for 118 claims ($4,947 per claim); and,
• there were 359 accidental injury claims that resulted in lost income, worth a total of $2.0m at an average of $5,583 per claim.

ISI CEO Peter Neilson says the latest statistics indicate a high degree of under-insurance. “When you factor in that the median house price in Christchurch prior to the earthquake was reported at $333,800, and that many people are likely to have had considerable mortgages against their properties, it becomes pretty clear that many people need more cover than they currently hold.”

“We understand that our industry still has a lot of work to do to ensure Kiwis are adequately covered,” explains Mr Neilson. “While 100 death claims was actually higher than we expected, the average claim payment of $176,000 intuitively feels a bit light – it’s only around three times the average salary and probably means that most families are only really covering their mortgage.”

And while this probably means that most families will not have to sell their homes, Mr Neilson says they are likely to have had no ongoing protection against the loss of income following the death of a loved one.

“We need a wider understanding of how many families are vulnerable to the loss of a major earner. Our under-insurance research project is aimed at improving our understanding of what needs to be done to ensure New Zealanders are better prepared for the uncertainties of life. As an industry, our job is to help them make better informed decisions and provide policies that are easy to understand and apply for.”


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