Earthquakes may further delay rebuild - English
Finance Minister Bill English says yesterday's 5.2 earthquake in Christchurch could further complicate matters with insurance companies and delay the city's rebuild.
English told TV3's The Nation that although the quake didn't cause physical damage, a "critical issue in Christchurch has been the confidence of the insurance companies".
"We've been working with them, Gerry Brownlee has to get some collective solutions to quite complex insurance problems, and part of the challenge of getting those solutions has been insurance companies are preferring to be insuring people again against a backdrop of no quakes, so that they're not taking obvious risks," he said.
English said the latest earthquake was a reminder that it wasn't just a matter of policy or process to get the rebuild going.
"There is the on-going concern that there can be further earthquakes, and each one of them has some effect on confidence."
He said the Government was trying to work with the insurance companies.
"From the Government's point of view we just want to push on as far as we can, because there are so many people there who want to get their lives back together."
GOVT AIMS TO SPEED UP PAYOUTS
The Government aims to speed up earthquake payouts by ensuring there is better co-operation between insurers, including the Earthquake Commission (EQC), English said.
There had been constrictions on insurance claims and payouts and that process needed to be opened up with measures led by Brownlee, English told a Christchurch business audience yesterday.
The Government could see momentum building on the rebuild, although it was not expecting an explosion in activity.
He said work on the insurance system within Christchurch was needed.
"There's a strong focus on the bottlenecks, particularly resolving the complexities around residential insurance," English said.
"We do need some generalised solutions to that problem so that we're not arguing house by house about insurers backed by multiple reinsurers trying to allocate different estimates of damage across 15 official earthquakes," he said.
"That's what is holding things up a bit, but we reckon in the next few months we can get quite a push on there."
English said Brownlee was overseeing a process whereby the insurance companies and the Earthquake Commission were working together to come up with some standard ways of resolving insurance claims.
The difficulties in this process included the complex relationship between insurers and reinsurers.
The reinsurers, who were making the big payouts, could demand different solutions to the way the New Zealand-based insurers reacted with their Christchurch customers.
"We're hopeful there will be some progress on that to help unblock more of the claims," English said.
- © Fairfax NZ News