22 February 2016

Insurance Council of NZ Changes Wording After Being Caught Out

A call by Christchurch accountant and EQ insurance statistics analysist, Cameron Preston seems to have been heeded by the Insurance Council of New Zealand.

On February 1st, ICNZ distributed a release (below) which stated “Nearly 5400 major repairs and rebuilds were completed in 2015 which reflected a 21% rise in the….” which prompted Mr Preston to raise concerns about phrasing and terminology being used by the ICNZ.

Mr Preston said ICNZ was wrong when it said “5400 major repairs and rebuilds were “completed” as what they meant was the claims / repairs and rebuilds were in fact “settled” which is very different. (see Mr Preston’s release included at the end of this update, explaining why it is important to make the distinction between completed and settled).

http://business.scoop.co.nz/2016/02/01/insurers-settle-20-more-claims-in-2015/

Below is the change made to the ICNZ release dated 1 Feb ON THE ICNZ WEBSITE after Mr Preston’s concerns were made public on Feb 2, despite Mr Grafton’s dismissal of Mr Preston’s concerns (also included at the end of this update).

Changed to this: http://www.icnz.org.nz/insurers-settle-20-more-claims-in-2015/

Mr Preston says the misconception that Cantabrians are having their houses repaired and rebuilt is perpetuated when it is repeated in the media and by various commentators on the progress in the region and this does not help the wider public understand how slow and difficult insurance and EQC resolution continues to be for many.

This issue is even more pertinent following claims in the media last week:

http://www.stuff.co.nz/national/politics/76957685/Government-agencies-inventing-numbers-to-meet-targets-says-report

For more information, contact Cameron Preston 021 1738 772 (Canterbury Claimants).

Cameron has just posted this on interest.co.nz http://www.interest.co.nz/opinion/80204/cam-prestons-take-whats-really-happening-christchurch-5-years-after-big-earthquake

Background:

Please see below for a copy of the media release highlighting ICNZ’s ongoing obfuscation regarding ChCh EQ stats

Media Release

2 February 2016

Private Insurance Settlement Figures Demand Greater Scrutiny

The Private Insurance sector continues to overstate the rate of progress of Canterbury earthquake insurance settlements.

That from Christchurch accountant Cameron Preston who says figures in a media release from the lobby group¹, the Insurance Council of New Zealand, are wrong.

The Chief Executive of the Insurance Council, Mr Tim Grafton said yesterday: “Nearly 5,400 major repairs and rebuilds were completed in 2015 which reflected a 21% rise in the settlement rate last year compared with 2014”.

Cam Preston says, if the data provided by the Insurance Council’s members is be to believed, they have cumulatively completed nearly 5,400 major repairs and rebuilds in total for the 5+ years ended 31 December 2015 (since the first earthquake), and not in the 2015 year as stated by Mr Grafton.

“The data² supporting Mr Grafton’s statement, which is supplied to the Insurance Council by the its private insurance company members, via the Ministry of Business Innovation and Employment (MBIE), clearly shows that in the 5+ years since the earthquake sequence began, only 2,430 repairs and 2,865 rebuilds have been completed by its members in Canterbury,” he says.

“Their own data contradicts their CE’s statement yesterday and the vast majority of those rebuilds and repairs (13,663 or 72% of all settlements) have been cash settled so let’s not jump to the conclusion that these are “builders on the ground” completed repairs and rebuilds. There are thousands of homes in the same condition as they were after the quakes which in itself could create another problem.”

Preston says it is incredibly disappointing that figures related to something which continues to cause so much stress and upset for people unnecessarily and years after the events, are still not being presented correctly.

He adds that it is just as concerning that the rate of completed repairs and rebuilds is slowing down, not accelerating as stated by Mr Grafton.

“Let’s take a look at Southern Response, the Crown entity charged with settling 7,800 of the 25,000 claims in Canterbury. SR has completed only 967 rebuilds and 569 repairs after more than 5 years, and progress is slowing³,” he says.

“Statistics for the other insurers are not available as they simply refuse to release them, and when they do they are over-stated or incorrect. Not only are the Mr Grafton’s statements wrong, but he is obfuscating. This means the reality, which is that private insurance industry is less than 50% of the way through their repair and rebuild programmes, and more worryingly they are actually slowing down, is lost. The delays to rebuilds and repairs are designed to save the insurers money by wearing policyholders down, who after 5+ years have run out of patience and energy, so simply throw in the towel and accept low ball cash offers,” he says.

References:

¹ http://www.scoop.co.nz/stories/BU1602/S00015/insurers-settle-20-more-claims-in-2015.htm

² http://www.icnz.org.nz/wp-content/uploads/Canterbury-Earthquake-Progress-Stats-Q4-2015.pdf

³http://southernresponse.co.nz/images/documents/Progress_to_the_end_of_December_2015.pdf

Note: the following from Ali Jones, Christchurch City Councillor and advocate for insurance claimants:

I've been working over the last 3-4 years with people to progress their claims, often dealing with Eqc, leading to claims going over cap. I had one 2 weeks ago - it should have been over cap three-4 years ago. The couple have paid for professional advice to support their position of having an over cap property; we are now requesting reimbursement for this costs incurred which are in the thousands.

These people are not exceptions.

I'm calling for a look at changing the law, so we can have in legislation, timeframes within which EQC and Private Insurers must settle claims. This is done overseas I believe - with financial penalties if this doesn't happen. And let me just add, private insurers are far from blameless in these delays. I am disappointed that Mr Grafton's media release does not acknowledge that his members could also do better and this is not only an issue for EQC.

ends

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