Natural disaster claims hit 10-year high
Natural-disaster claims in 2013 were the highest in a decade with more than $175 million paid out due to major storms, insurers say.
The Insurance Council of New Zealand (ICNZ) says in its annual report that the country was battered by a number of storms last year including a record-breaking storm in June that led to a spike in insurance claims.
As previously reported insurers have settled $10.2 billion of claims related to the Christchurch earthquake with $1.56b in residential claims settled in 2013.
More than $4 million in residential earthquake claims were settled daily, showing the industry was on track to meet its deadline to settle all earthquake claims by 2016, the council said.
ICNZ said insurers were concerned about the number of claims that the Earthquake Commission (EQC) continued to move on to the industry because they were assessed as exceeding the EQC liability cap.
This affected the capital reserves insurance companies were required to hold under the Reserve Bank's licensing regime, it said.
The EQC covers the first $100,000 of a claim while insurance companies are liable for the balance.
In her report, ICNZ chairwoman Jacki Johnson took aim at the Fire Service levy calling it a "sore point" for insurers.
The levy was a tax applied to insurance premiums for domestic and commercial property cover.
She said it was is an unfair tax as the under-insured and non-insured were able to benefit from the public good provided by the Fire Service, and it added to the cost of insurance.
A shift to another system such as a property tax would be more equitable and efficient, and bring a net benefit to New Zealanders, she said.
ICNZ chief executive Tim Grafton said insurance council research completed by the New Zealand Institute of Economic Research showed the levy failed all criteria for best-practice tax.
In March the ICNZ faced its own earthquake risk and relocated to new premises on Wellington's The Terrace, the council reported.