Vero hits back at EQC criticism
New Zealand's second-largest insurer is rejecting a "speculative" claim by the Earthquake Commission that providers may try to pass the buck on their earthquake costs.
In the commission's 2011-12 annual report, released last week, chairman Michael Wintringham said private insurers faced paying huge sums to settle commercial and residential claims in Canterbury
''In this environment, there is an incentive for insurers to reduce their own liabilities by shifting costs to the Crown or to other parties,'' it said.
Vero chief executive Gary Dransfield dismissed the comment as ''speculative [and] unsubstantiated''.
"It suggests insurers would act or are acting improperly and in a manner not in the interests of New Zealand, its Government or the people of Canterbury,'' he said.
''The reality is that the contribution of insurers to the Christchurch recovery has saved the Government billions of dollars.''
Insurers and reinsurers would meet about 80 per cent of the rebuild cost, Dransfield said, and private insurers had already paid out $5 billion in claims.
''If that cost had to be met by the New Zealand Government alone, there would be a massive rise in corporate and personal taxes to meet the bill,'' he said.
"We need to instill confidence in the people of Canterbury and also overseas investors that we have the leadership and quality organisations capable of a unified, efficient and speedy recovery from the earthquakes."
Wintringham said the EQC Act needed a review to remove ambiguity about the liability of public and private insurers.
The Reserve Bank estimates the cost of Canterbury earthquake insurance claims at $30b.