Shaky foundations

15 February 2012

With claims the christchurch insurance industry is 'underperforming', State's Executive General Manager Mary-Jane Daly, sticks by her company's performance.

In the face of all the heartache and the heartbreak, and in spite of negative headlines and understandable frustrations, I firmly believe that insurance actually ‘went right’ more than it ‘went wrong’. Maybe not for every individual in every situation, but the sector has proved its worth in this time of need.

With claims still in limbo, business interruption payments are due to finish and uncertainty around the future of business in Christchurch - the question to ask is: how would Canterbury have coped without insurance?

Already IAG companies (of which State is the country’s largest direct insurer) have paid out close to $1b in claims. That’s over $1.7m a day since the first big quake on 4 September 2010. And we have a clear plan through 2012 to accelerate rebuilds in safe areas of the city as we, and our customers, know more about the risk.

Claims that insurers may be sitting on money from international reinsurers in order to profit from the situation are simply not true. In fact, reinsurance only pays out when an insurance claim has been settled. It is in all our interests to settle claims as quickly as possible.

Insurance is an industry that people fall in love with because they are able to help people in a meaningful way in their time of need. We all find it incredibly frustrating when we can’t quickly help people to get back to where they were before the earthquakes. We also want to limit ‘claims inflation’ where the cost of repairs goes up over time. This is important because it will contain the future cost of reinsurance helping to keep insurance affordable going forward. But the situation is incredibly complex with the unprecedented scale of the event, ongoing aftershocks, many parties involved and decisions to be made around land use and building standards I empathise completely with all those affected – and that includes our staff and their families who work and live in Christchurch.

Yes we hear of insurance failures, and there are inevitable disputes, and it is unfortunate when these dominate the headlines. However there are far more success and the team regularly receive notes of thanks and complements for their efforts in finalising claims.

But it is our desire to ‘do right’ that has guided our response. I’m a mainlander myself, growing up in Cheviot and going to school and university in Christchurch. At the time of the September earthquake not a single one of us could have predicted the challenges Cantabrians would face over the next fifteen months. Even now, as we commemorate the first anniversary of our largest natural disaster since the 1931 Napier earthquake, the ground continues to shake.

After September’s quake we knew what to do and we acted quickly. In February, as we saw images unfold of the Christ Church Cathedral in ruins, of carnage on Cashel Street, of houses and vehicles claimed by liquefaction in the suburbs, it soon became apparent the February shake was different.

From the beginning our aim was to aid and assist our customers through whatever insurance situation they may have found themselves in. We made every effort to be easy to deal with, to be accessible and to give customers continuity and confidence.

One of the biggest challenges we faced was confusion surrounding the role of the Earthquake Commission (EQC) and that of private insurers. Helping customers understand the role that State held and that of the EQC was vital: who would cover what, how would it be assessed, what was the timing and where does the information come from?

In response to the February quakes and the questions arising we were quick to host mobile claims centres from campervans. We understood we needed to get into communities and interact with customers as it suited them. In the months since I have personally featured on talkback radio fielding questions from customers and the public. I have also voiced a series of radio ads where we helped to strip down the technicalities of the insurance and EQC processes.

What makes me really proud though is the response and resilience of our people who have shown what it really means to be a Kiwi. State staff, many directly affected themselves, have stood shoulder-to-shoulder with the people of Canterbury and will continue to do so as we navigate our way through the future insurance landscape.

We’ve had staff who with families of their own in the quake zone to care for, finished their shifts with us then headed straight out into the community to help our customers. One example is of a staff member who, after speaking with a partially blind customer whose talking clock had broken, went straight to visit her after work and fixed the clock so she could tell the time. It’s the little things like this that make a difference and I could tell you dozens of similar stories.

The impact of the quakes that hit Canterbury is unprecedented to say the least. The whole insurance industry has been rocked. Big insurers like AMI have required Government support while some niche insurers have pulled out of the New Zealand market all together.

We have witnessed heartbreak and heroism on an unimaginable scale. We still have a long way to go before we can look back on these events and say ‘we made it, we’re all clear’. What we’ve managed to achieve so far, the responses and actions of my staff across the country, from the policy makers to the claims staff, make me immensely proud.

A proud Cantabrian, a proud Kiwi.