AMI's quake claims handler to shed staff

ALAN WOOD
Last updated 05:00 18/03/2013

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The company managing AMI Insurance's earthquake claims unit is being downsized gradually, with staff to leave by natural attrition and redundancy.

Southern Response chief executive Peter Rose said the company had fully settled about 31 per cent of AMI's claims and was now moving more into the rebuild rather than claims settlement phase.

The insurance claims handler is working to settle thousands of AMI claims relating to 6670 Canterbury properties where damage exceeds the Earthquake Commission cap of $100,000.

Southern Response was formed after insurer AMI failed, which also led to the sale of its ongoing business to large insurer IAG.

Between now and September the number of permanent employees would be reduced from about 165 to 135 as Southern Response moved further into the home build phase for customers, Rose said.

The staffing total included 12 employees seconded from insurer IAG which had bought the forward going business of AMI.

Those IAG secondees were being encouraged to join Southern Response on a permanent basis.

By 2016 the Southern Response team would be dismantled and the permanent staff would be made redundant and given associated redundancy packages, Rose said.

The chief executive was speaking after The Press received an anonymous letter saying Southern Response had recently released a business plan showing staffing levels for the next three years, with cuts to frontline staff outlined.

Rose said Southern Response was essentially paying for work done by staff at its rebuild project manager, Arrow International, as part of the claims settlement process.

Arrow now had around 120 staff in those associated roles.

"As we move through the insurance phase into the build phase, the concentration of the work that Southern Response people do reduces somewhat and the concentration of the Arrow people stays the same or increases . . .

"So we've been doing some modelling about what that looks like and the expectation is that around September we'll drop the need for about 30 staff . . .

"We're allowing natural attrition to take its course," Rose said of the initial part of the downsizing process.

"By the end of 2016 we go. We're a special purpose organisation, we don't have a future beyond the end of Southern Response (but) we're talking to IAG about the prospect of taking some of our good staff."

Southern Response and project manager Arrow had helped complete construction on 62 homes, with another 122 under construction and 620 in the design/documentation phase, according to the latest February figures.

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About 2378 home owners were rebuilding with Southern Response, with 1511 choosing to buy an existing house, 761 taking a cash settlement and 281 doing a customer-managed rebuild.

Not all Southern Response customers have been given offers or made choices on a way forward.

"We haven't done as many builds as we would like, and we've been very public about ramping those up substantially . . .

"That will be coming principally through the work of Arrow and our building contractors," Rose said.

- BusinessDay.co.nz

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