Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 


Vero CEO calls for significant changes to EQC Act

Vero CEO calls for significant changes to EQC Act

Vero Chief Executive Gary Dransfield says the EQC Act Review is a “once in a generation” opportunity to significantly improve the way natural disaster insurance is funded and managed in New Zealand.

Addressing the Trans-Tasman Business Circle at a lunch in Wellington today, Mr Dransfield said: “I believe it would be a lost opportunity if Government, insurers and others simply used the review to finesse existing legislation.

“For insurers, it should be the start of an ongoing reform process designed to deliver a resilient general insurance sector that underpins New Zealand’s economic competitiveness.

“For Government, it should be an opportunity to consider the best way to reduce the fiscal risk to the Crown for natural disasters, while providing an acceptable level of protection for public and private property.”

The latest Reserve Bank of New Zealand Financial Stability Report says expected total claims costs related to the Canterbury earthquakes may exceed $30 billion.

That would be more than 15% of the GDP of New Zealand. Fortunately, 80% of those costs are expected to be met by insurers and reinsurers.

“If the New Zealand Government had to borrow what reinsurers and insurers are paying out for the Canterbury recovery, the Government would have to find an additional $800 million a year in debt interest payments.”

Mr Dransfield said insurance had protected New Zealand from the full fiscal impact of the Canterbury earthquakes.

“The Canterbury earthquakes exposed weaknesses in the current EQC and private insurer hybrid insurance approach,” he said.

“The model is systemically flawed when placed under the stress of a massive volume of claims and no consistency in the terms and conditions of policies being managed by both the EQC and private insurers.

“Having a government insurer and private insurers responsible for claims from the same customer has made the Canterbury recovery extraordinarily complex and has reduced claims management speed and efficiency.

“Another major deficiency of the current approach is that it increases costs and wastes capital for both the Government and private insurers. Those additional costs are ultimately met by taxpayers and customers.”

Given the Government’s commitment to a balanced budget and debt reduction, Vero questioned whether it was sensible to operate a fully resourced and funded public insurance agency with the sole mandate of managing claims after a major natural hazard disaster.

Mr Dransfield concluded by saying that solid progress was being made and that prospects were bright for investment in Canterbury.

“That progress would have been faster and more substantial if not for the inefficiencies of the current earthquake insurance model. Pleasingly, we now have an opportunity to rectify those.”

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell:
On The Last Rites For The TPP

The Trans Pacific Partnership trade deal is one of those litmus issues that has always had more to do with one’s place on the political spectrum than with any imminent reality.

To date, the Greens have opposed (a) a wide range of the leaked content of the TPP (b) the secretive way it has been negotiated and (c) the undemocratic way in which any final document would be ratified. Labour has shared some of those concerns, but while remaining generally supportive of the deal itself.

National has, for its part, been very enthusiastic about the TPP, while still giving assurances about Pharmac being protected... For the TPP’s friends and foes alike though, the end now seems nigh. More>>

 
 

Gordon Campbell: On The Farcical Elevation Of David Seymour

With the election won, it’s time to find jobs for the boy. David Seymour is the Act Party’s latest scrounger to be rewarded by the National Party, and not only with a seat in Parliament. More>>

ALSO:

As Key Mulls Joining ISIS Fighting: McCully Speech To UN Backs Security Council Bid

It is an honour to address you today on behalf of the Prime Minister and Government of New Zealand. Our General Election took place last week - our Prime Minister Rt Hon John Key is engaged in forming a government and that is why he is unable to be here in New York... More>>

ALSO:

Labour: Cunliffe Triggers Party Wide Leadership Contest

David Cunliffe has resigned as Labour Leader, but says he will seek re-election... If there is any contest the election will have to go through a process involving the party membership and union affiliates. More>>

ALSO:

Flyover Appeal: Progress And Certainty, Or Confusion And More Delays?

Lindsay Shelton: The Transport Agency, embarrassed by the rejection of its flyover alongside the Basin Reserve, says it’s appealing because the decision could “constrain progress.” Yet for most clear-sighted Wellingtonians a 300-metre-long concrete structure above Kent and Cambridge Terraces would in no way be seen as progress… More>>

ALSO:

Gordon Campbell: On Cunliffe’s Last Stand

Right now, embattled Labour leader David Cunliffe has three options. None of them are particularly attractive for him personally, or for the Labour Party... More>>

ALSO:

Key Seeking 'New Ideas': Look To Children’s Commissioner On Poverty - Greens

John Key should not reinvent the wheel when it comes to ideas for tackling child poverty, and instead look to the recommendations of the Children’s Commissioner’s Expert Group on Child Poverty, Green Party co-leader Metiria Turei says. More>>

ALSO:

'Safe To Re-Enter' - OIA Docs: Safety Is Absolute Priority At Pike River Mine

“We understand that the time it is taking to complete our evaluation of the risks is frustrating for the family members and we are trying to complete this work as quickly as we can,” Ms Dunphy says. “It is Solid Energy’s responsibility to make this decision and we will do so, once we have all the information required to make a fully-informed decision.” More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
More RSS  RSS
 
 
 
 
Politics
Search Scoop  
 
 
Powered by Vodafone
NZ independent news