Press Release – New Zealand Labour Party
Christchurch Earthquake bulletin edition 154 A regular bulletin started by the Labour Party’s Christchurch team to keep people in their electorates and media informed about what is happening at a grass roots level .
1 December 2011 MEDIA STATEMENT
Christchurch Earthquake bulletin edition 154
A regular bulletin started by the Labour Party’s Christchurch team to keep people in their electorates and media informed about what is happening at a grass roots level.
The NZ Industry Shockwaves Conference, hosted by the Australia New Zealand Institute of Insurance & Finance, which finishes today, has been a great opportunity to reflect and collaborate on solutions and pathways forward for Canterbury. The two day conference was established to confront key earthquake related issues that insurance professionals are facing in light of recent activities in the region. Christchurch East MP Lianne Dalziel, who gave a keynote speech at the conference yesterday, said listening to senior representatives of the insurance industry, EQC and Tonkin & Taylor, and a representative of EAP Services, was really informative in gaining an over-arching perspective of the scale of what Canterbury has been through.
The EAP Services representative described the concerns that people were bringing up in counselling as having shifted from safety of self and family, to frustration with the pace of the rebuild – roads, housing, insurance – and communication from employers. Concerns about children (sensitivity to quakes, schooling, childcare) had remained constant, while optimism about Christchurch as a place to live and work was increasing.
Good data is gold was the take home message from the insurance industry. Issues identified were: managing expectations, building insurance staff resilience (many of whom were personally affected), under-insurance in commercial areas for a number of reasons including poor quality valuations. Whether 12 months is realistic for indemnity in insurance policies, questions around how the industry could take a ‘big picture’ view, questions around the capacity for insurance going forward and at what price, and if there is scope to reduce duplication in EQC/Insurance loss adjusting effort. The industry is very keen for the public to know that it is not in their interests to delay settling claims – in fact due to liability they represent it is in their interests to settle quickly from a financial point of view as well as a customer service point of view.
The EQC presentation put the scope of the event we have experienced in the context of the challenges they never anticipated:
• Multiple claims from almost all claimants for a total of 13 different ‘insurance events’.
• Complexities in allocating the losses – manual efforts required, so difficult to meet timeliness expectations of claimants and validity expectations of reinsurers and EQC’s governing legislation.
• Twin events were never envisaged, leading to uncertainty in the interpretation of the reinstatement provisions of EQC’s cover;
• The determination of EQC’s liability for restoration of the land to its pre-event state involves complex engineering and legal considerations that were never anticipated when the cover was devised.
• Assembling and training the workforce and coordinating service delivery with other agencies, while addressing these complexities
EQC asked these questions and we believe this should be the basis for a public debate going forward, because they all raise further questions of cost and who decides. To what extent can we:
• Avoid the risk? This is a question directed to land use.
• Control the risk? This relates to building practices.
• Transfer (financial) risk? This is where insurance comes in.
• Accept the risk? What is our level of risk tolerance and what about the banks?
Lianne Dalziel’s keynote address asked that a full review of what has occurred be undertaken so Cantabrians can learn from mistakes as well as build on the positives. See Lianne’s full speech here: http://labour.org.nz/news/turning-disaster-into-opportunity-keynote-address-to-australian-nz-institute-of-insurance-finan.