Christchurch Earthquake bulletin edition 154
Christchurch
LABOUR MPs
1 December 2011
MEDIA STATEMENT
Christchurch Earthquake bulletin edition 154
A regular bulletin started by the Labour Party’s Christchurch team to keep people in their electorates and media informed about what is happening at a grass roots level.
The NZ Industry Shockwaves
Conference, hosted by the Australia New Zealand Institute of
Insurance & Finance, which finishes today, has been a great
opportunity to reflect and collaborate on solutions and
pathways forward for Canterbury. The two day conference was
established to confront key earthquake related issues that
insurance professionals are facing in light of recent
activities in the region. Christchurch East MP Lianne
Dalziel, who gave a keynote speech at the conference
yesterday, said listening to senior representatives of the
insurance industry, EQC and Tonkin & Taylor, and a
representative of EAP Services, was really informative in
gaining an over-arching perspective of the scale of what
Canterbury has been through.
The EAP Services
representative described the concerns that people were
bringing up in counselling as having shifted from safety of
self and family, to frustration with the pace of the rebuild
– roads, housing, insurance – and communication from
employers. Concerns about children (sensitivity to quakes,
schooling, childcare) had remained constant, while optimism
about Christchurch as a place to live and work was
increasing.
Good data is gold was the take home message from the insurance industry. Issues identified were: managing expectations, building insurance staff resilience (many of whom were personally affected), under-insurance in commercial areas for a number of reasons including poor quality valuations. Whether 12 months is realistic for indemnity in insurance policies, questions around how the industry could take a ‘big picture’ view, questions around the capacity for insurance going forward and at what price, and if there is scope to reduce duplication in EQC/Insurance loss adjusting effort. The industry is very keen for the public to know that it is not in their interests to delay settling claims – in fact due to liability they represent it is in their interests to settle quickly from a financial point of view as well as a customer service point of view.
The EQC presentation put the
scope of the event we have experienced in the context of the
challenges they never anticipated:
• Multiple
claims from almost all claimants for a total of 13 different
‘insurance events’.
• Complexities in
allocating the losses – manual efforts required, so
difficult to meet timeliness expectations of claimants and
validity expectations of reinsurers and EQC’s governing
legislation.
• Twin events were never
envisaged, leading to uncertainty in the interpretation of
the reinstatement provisions of EQC’s cover;
•
The determination of EQC’s liability for restoration of
the land to its pre-event state involves complex engineering
and legal considerations that were never anticipated when
the cover was devised.
• Assembling and
training the workforce and coordinating service delivery
with other agencies, while addressing these complexities
EQC asked these questions and we believe this should be
the basis for a public debate going forward, because they
all raise further questions of cost and who decides. To
what extent can we:
• Avoid the risk? This is
a question directed to land use.
• Control the
risk? This relates to building practices.
•
Transfer (financial) risk? This is where insurance comes in.
• Accept the risk? What is our level of risk
tolerance and what about the banks?
Lianne Dalziel’s
keynote address asked that a full review of what has
occurred be undertaken so Cantabrians can learn from
mistakes as well as build on the positives. See Lianne’s
full speech here: http://labour.org.nz/news/turning-disaster-into-opportunity-keynote-address-to-australian-nz-institute-of-insurance-finan.