Call to identify insurers at fault

Last updated 05:00 27/07/2012

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Insurance bosses have hit back after Earthquake Recovery Minister Gerry Brownlee said he has "lost patience" with the industry over the quake rebuild.

Brownlee yesterday vented his frustration over the stalled settlement process and laid the blame squarely with the private insurance market.

"I think it's time for us to stop talking about the problems, recognise the Government has stepped up . . . EQC has stepped up . . . and Cera [Canterbury Earthquake Recovery Authority] has stepped up," he said.

"Now the private sector needs to do the sort of things that the private sector claims it can do so particularly well. I've lost my patience."

Insurance Council chief executive Chris Ryan said Brownlee should say which companies were at fault.

"He's got to identify, if there are issues, which companies he's referring to. What we're getting here is general statements without specific details.

"With Cera and EQC, it's one organisation. With insurers it's about 15. So it's really important if he makes those statements, to [know] which ones he's referring to."

Insurers were working as hard and well as anyone in a "remarkably difficult situation", he said.

"The leadership style has to be inclusive and firing shots at people across the bow is going to lose any leadership for the recovery."

Brownlee said the release of an EQC geotechnical report and its steady claims settlements would "remove some of the various excuses" for insurers.

"Things are taking too long and I don't believe that EQC is the problem," he said.

IAG New Zealand chief executive Jacki Johnson said it was disappointing to hear "of issues being . . . described as ‘excuses' " by Brownlee.

“Some comments today ignore the work we have been doing with EQC and Cera over many months to get the best long-term solutions for the people of Canterbury and that is disappointing."

Other insurers were coy on the minister's comments yesterday.

Peter Rose, chief executive of AMI claims management company Southern Response, said it "[sounded] like" finger pointing at the industry, but would not be drawn further.

"I certainly won't be commenting on anything that our minister says."

Lumley Insurance earthquake response manager John Grant said insurers were not entirely to blame for slow progress.

"What people don't appreciate is this is a very complex situation. There's a lot of reasons why things have been slow. There's no question EQC have played a bit part in complicating matters but . . . it's just the structure of the dual insurance system."

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Despite the strong words, Brownlee said the Government had no plans to wade in to the insurance market.

"[We're] not going to step in and take over insurance companies or contracts [but] they've got a problem and they need to get over it.

"At the moment . . . people are just feeling like nothing is happening."

Meanwhile, EQC chief executive Ian Simpson yesterday insisted the commission was "far from broke" despite an expected $1 billion shortfall in its natural disaster fund. About $3b remained in its fund and had it $4b in reinsurance funds to call on.

"We may be calling on the Crown guarantee for around $1b to cover any unfunded losses," Simpson said.

The commission had recently had its reinsurance renewed, he said.

- The Press


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