Insurance giant wants claim changes
Insurance giant Vero has asked the Government to let private insurers manage all aspects of certain Christchurch earthquake claims without the involvement of the Earthquake Commission (EQC).
The Australian insurer told the Trans-Tasman Business Circle in Wellington today that Vero saw that as a way to speed up the earthquake claims handling for thousands of claimants in Christchurch.
"For example, Vero has recently put to Government and reinsurers suggestions regarding the management by private insurers of all aspects of selected shared-property earthquake claims," Vero chief executive Gary Dransfield said.
"We see this as not only a way to more quickly manage claims affecting thousands of people in Christchurch.
"It would also be a useful pilot of the type of innovative thinking and processes needed for any future natural disaster in New Zealand."
The insurance industry has over the past two years referred to the slowness and inefficiency of the parallel claims handling process between EQC and private insurers.
Claimants must make their natural disaster claims with EQC. It decides if the claim is greater than $100,000 plus GST. if that is so the claim is eventually referred to the private insurer to handle.
The "apportionment" of claims between EQC and private insurers is understood to still be a thorny issue.
Vero, the second-largest general insurer in New Zealand, has about 20,000 claims from the Christchurch quakes. It has settled about 60 per cent, paying out $2.2 billion.
Dransfield referred to improvements still needed in Christchurch in the way claims are handled.
"We can improve recovery efficiency in Christchurch and any future crises through harmonisation of claims management processes; agreement on apportionment methodology and increased involvement of private insurers in claims management," he said.
Vero has been leading public comment on the need for reform of the way natural disasters are handled in New Zealand. It has lobbied for more frontline roles for the private insurers as opposed to the EQC.
Dransfield's comments follow those a week ago of fellow Australian insurance giant IAG in a report to investors. IAG said the major obstacles to settling claims in Christchurch were land remediation issues with EQC and customers' slowness to decide on settlement options.
IAG New Zealand has refused to elaborate, but it appears relations between insurers and EQC remains strained over land remediation issues and apportionment.
"Today I sense there is a greater sense of realism on the part of government agencies about the duration of the recovery and the relative efficiency of private insurers in claims management," Dransfield said.