Rebuilds will soon ramp up
Southern Response is not happy with the low number of earthquake rebuilds it has completed or under way.
But the Government-owned insurance claims manager has paved the way for ramping up work next year, its chief executive told an annual public meeting in Christchurch yesterday.
Southern Response is the claims manager of failed insurer AMI following the sale of its ongoing business to IAG in April.
At a lightly attended general meeting at the Addington Events Centre, chief executive Peter Rose said the company was the only insurer to completely open up its claims process figures.
"We're the only insurer to provide all our information about our progress on our website . . ."
Southern Response was "not happy" that it had rebuilt only 42 homes with 90 under construction at the end of November, he said.
The latest figures to the end of November showed 90 per cent of the 6651 claimants had been given a settlement offer, and 28 per cent of claims have been settled, many through cash payments. About 3 per cent of customers were formally disputing offers.
Rose said the company had a good platform for starting to get more homes rebuilt and claims settled.
So far, 35 per cent of homeowners under the scheme have elected to rebuild either through the Southern Response programme or with their own builder.
Southern Response expected 3500 houses, or half of its over-cap claims, would be rebuilt by its project manager, Arrow International.
The company aims to wind up by mid-2016, he said, which would mean it has to complete roughly 2 rebuilds a day for the next 3 years.
The 2126 red-zoners insured by Southern Response was the land group with the highest rate of claim offers and settlement. Half of them have opted to buy an existing house, and just less than a quarter took a cash settlement, the report shows.
The company had been encouraging people to make a decision about their offer to make sure they continued toward settlement, Rose said. The company's finances were adequate, with a $900m backstop pledged by Government, and the company was keen to settle all claims fairly and as quickly as possible, he said.
Also, Southern Response was the only insurer with over-cap repairs and rebuilds underway on TC3 land with techniques best suited to the ground conditions, he said.
Fewer than 30 people turned up for yesterday's meeting, the first since the Government took over the company in April and none had any questions for the board and executive.
Chairman Ross Butler said he saw the low turnout as a sign people were not upset with the company's general performance. He had not expected many people as the meeting was to discuss the business rather than individual claims.
"Despite the uncertainties and unknowns that will face us in the future, the board is confident that all claims can be met," he said.
Southern Response's total earthquake claims were estimated at $2.2 billion. It paid out $326m in the year to June, compared with $48m in the previous year.
It was owed $937m in reinsurance at June 30, and received $380m from the sale of the AMI business to IAG. The company made a loss of $186.6m for the year to June, compared with $704.5m the year before.
The company's 130 Christchurch-based staff and 50 employees in Auckland were working as hard as possible to effectively put themselves out of a job, he said. He thanked them for their commitment to stick with the company to help wind it up.
- © Fairfax NZ News
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