Private eyes shutting up shop

MATT NIPPERT
Last updated 05:00 06/07/2014

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The days of the sole-charge gumshoe are waning, with seismic changes triggered by the Christchurch earthquakes seeing many independent investigators shutting up shop or taking up in-house roles with the insurance industry.

Veteran investigator Ron McQuilter, chair of the New Zealand Institute of Private Investigators, said the quakes have reshaped his industry.

McQuilter said the sudden spike in demand for insurance investigators - probing claims typically provides a large chunk of investigators' business - was matched with a trend among insurance companies to bring this sort of work in-house.

"These were two things that combined which led to a drought of private investigators in big cities," he said.

Verdi van Beek, the founder of Christchurch-based firm Avon Investigations, said his local industry had swollen, and then been swallowed, by the insurance industry in the wake of the quakes.

He said in late 2011 Christchurch was flooded with private investigators, typically former police officers.

"It was a bit like the police reunion - you were bumping into guys you hadn't seen in years," he said.

"The guys down here I know, they are all tied up with this sort of work. One is nominally independent, but he now does all his work in-house [for insurers]."

Former Serious Fraud Office boss Adam Feeley warned up to 20 per cent of all insurance claims could be fraudulent in 2012, but van Beek is sceptical of that..

He said a large proportion of this alleged fraud could be explained by post-quake demand pressures driving up prices for materials and labour.

But he said genuine fraud cases were still coming out of Christchurch: "One guy had six rental properties, and took a single damaged barbecue around to each one to take pictures of. I don't know why he needed six barbecues, but he tried getting them all replaced."

McQuilter said the industry has never been particularly large - he estimated during the "good old days" only 300 worked the field - but it was now shrinking as work associated with the rebuild started to diminish and relocated investigators quit the field rather than re-establish their businesses.

"A lot of these guys went to Christchurch and worked down there, they were on big money to start with but those days are gone," he said.

McQuilter is relatively nonplussed at his shrinking industry. "It might well be a good thing that there's less people: People like us are doing OK."

Insurance Council operations manager Terry Jordan said insurers were reassessing in-house positions and the trend now was to outsource such work. "Effectively their in-house investigators are now being replaced with contractors," he said.

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Jordan said EQC had been a big employer of investigators in the aftermath of the quakes.

The Earthquake Commission said its hiring of in-house investigators had peaked.

At its height the EQC also contracted 210 investigators from Australian firm Verifacts, but this work pool was drained as the claims backlog was cleared.

"The EQC claims review team is now resourced with 11 investigators, the largest number of investigators we have employed to date. The size of this team will not be reducing at this stage as we focus on proactively reviewing claims for leakage and fraud," Reid Stiven, general manager of the Canterbury Home Repair Programme at EQC, said.

- Sunday Star Times

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