'EQC holding up payouts'
IAG New Zealand says the big obstacles to finalising claims in Christchurch now are the Earthquake Commission's decisions on land damage and customers dragging the chain on rebuild decisions.
New Zealand's biggest general insurer made the comments with the release of IAG's results across the Australian, Asian and New Zealand businesses.
The general insurer, which has about 40 per cent market share in New Zealand after buying AMI Insurance in March last year, said it had paid $2.2 billion in Canterbury earthquake claim settlements in the year to June 2013, more than the previous year's $1.3b. More than two thirds of the settlements are commercial claims.
IAG NZ chief executive Jacki Johnson was not available yesterday to elaborate on the comments in IAG's investor report.
Neither was a representative available from the EQC to explain its position.
IAG NZ said it was continuing to work with Treasury in its review of the Earthquake Commission Act 1993.
"This has focused on developing a set of design principles to re-shape the updated act and the role the EQC will play in future natural disasters."
Legislation bringing the changes was expected to be introduced early next year and passed before the November 2014 general election, IAG said.
IAG has commented in the past that Canterbury claimants who had never built or wanted to build new homes had been slow in making the several decisions required in the building process.
All up, IAG NZ has about 6500 properties to repair, rebuild or settle through cash.
IAG NZ 's annual insurance profit was A$115 million (NZ$131m), up 11.7 per cent on the 2012 June year.
The result was the first full year with AMI Insurance included, whereas the year before AMI's contribution was three months of premiums.
Gross premiums grew 27 per cent in New Zealand dollar terms to $1.8 billion and that was due to increases in premium prices and the 12-month contribution of AMI. Excluding AMI, gross premiums rose 5.7 per cent.
Two-thirds of IAG's business in New Zealand is personal insurance including home and contents and car, and one-third commercial.
IAG said it was on track to make $30m of savings by next April from the integration of AMI. The cost of acquisition and integration was about $15m. Its Australian parent posted an insurance profit of more than A$1.4b, up 66 per cent. That was achieved from a 12 per cent increase in gross premiums to A$9.5b. IAG's net profit was up 275 per cent at A$776m.
IAG chief executive Mike Wilkins said the result showed further improvement in the group's underlying business performance.
One factor helping the result was fewer peril claims than allowed for.
Wilkins said IAG's performance would continue to improve in the latest June year, and it looked forward to more premium growth from all its divisions.