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Friday, 1 June 2012

Lianne Dalziel - Quake reinsurance has wider ramifications

MP Lianne Dalziel has an item on her website about major Chinese insurer, China Taiping, pulling out of Christchurch and Wellington because of the risks involved.

The article is here. China Taiping’s New Zealand website is here (no mention of this issue). Website New Zealand Investor has similar information here.


Earthquake Recovery Strategy released

CERA have made the Christchurch earthquake Recovery Strategy available on their website here.

There will be public “engagement opportunities”, which are set out here.

From the CERA website:

The Recovery Strategy provides a vision, goals and a road map for ensuring the success of greater Christchurch for recovery and future leadership in earthquake resilience.

The Recovery Strategy Vision is:

Greater Christchurch recovers and progresses as a place to be proud of an attractive and vibrant place to live, work, visit and invest - mō tātou, ā, mō kāuri ā muri ake nei - for us and our children after us.

The community is at the heart of the vision and the success of recovery.

As far as community engagement is concerned, this is CERA’s commitment to the process:

CERA considers ongoing engagement is required to successfully implement the Recovery Strategy.

CERA’s Community Engagement Strategy [PDF 65KB] is a commitment to work transparently and inclusively. It commits CERA to the following when involving communities in the development of programmes and plans for recovery:

  • inclusivity – seeking out the voices of those that might otherwise not be heard, recognising that communities have diverse needs;
  • integrity – engaging with communities in honest, consistent and responsible ways;
  • building good relationships and earning respect – recognising that this requires time, attention and trust;
  • communicating in an honest, sensitive and timely fashion – recognising that people need access to information that can help them make decisions for their futures; and
  • clarity and accountability – so that everyone knows who is making the final decision and how much influence people and communities can have on the decisions that need to be made to rebuild and revitalise Canterbury.

How community engagement is undertaken during the development of the recovery programmes and plans will vary depending on the nature of, and those involved in, the issues being addressed.

In line with the International Association for Public Participation spectrum of public participation [PDF 228KB], CERA's community engagement framework [PDF 228KB] uses different tools such as website information, written submissions, public meetings, stakeholder workshops and community forums.

Thursday, 31 May 2012

EQC fiddling with it’s FAQs again.

In the last day or two EQC have removed part of it’s FAQ on TC3 land (here). As with previous occasions there is no note indicating a change has been made, what the change was, and why it was made.

The text that has been removed is below. The second section, about insurance companies honouring a policy if land is considered uneconomic to repair, seems crucial information.

Some land claims issues

The ‘Financial Agony Aunt’ also threw up some issues to do with the settlement of land claims. The Technical Categories do not affect your land claim, they are part of your building claim with EQC and your insurer. But land claims are an important issue and worth discussing all the same.

Will insurers still honour a policy and repair a house if the land underneath is considered uneconomic to repair?

If your land is considered to be uneconomic to repair by EQC, it does not necessarily mean the land cannot be built on.

For example, if EQC decided to pay out for the maximum entitlement under the Earthquake Commission Act, you and your insurer would need to discuss next steps, based on your individual policy and specific circumstances.  Of course the maximum entitlement will not be paid in all cases – it will depend on the area of insured land that is damaged.

Your insurer may require you to provide for any shortfall in the cost of remediation before agreeing to repair or rebuild your home.

The maximum entitlement depends on a number of factors including the minimum allowable lot size for properties in your area, as stated in the council’s District Plan. This minimum lot size varies across the region. It is not 450m2 in all areas. 

What does EQC cover as part of a land claim?

If your house is insured, EQC also insures a defined area of your residential land. EQC will assess the amount of damage to your residential land and provide cover up to the maximum amount specified in the Earthquake Commission Act.

Residential land is land on which the house is situated, and land within 8 metres of the house.

Is EQC planning to stop covering land?

No. Our Briefing to the Incoming Minister, from December 2011, discussed changes to the way EQC covers land but crucially for Canterbury customers:

There is no suggestion land cover will stop

EQC itself doesn’t make these decisions, Parliament does by changing the Earthquake Commission Act

Changes will not be retrospective, so all current claims will be covered by the current cover.


Wednesday, 30 May 2012

Update – Phone calls and getting claim information from your insurance company

At a CanCERN meeting last night it was mentioned that some insurance companies record telephone conversations between the company and claimants. Sometimes this is done for training purposes, sometimes for quality control.

Ask for a transcript, or a CD, of the calls. The person concerned had asked for, and got, the calls on a CD. This helped focus the insurance company’s mind and eliminated disagreement over who said what.

The previous post on getting claim information from your insurance company is here.


Red Cross Grants

A reminder of the Red Cross grants still available for those who have experienced earthquake damage.

Red Zoners on the move should check out the grant for independent advice (including legal expenses) – available to vulnerable people and those with a child or children under 18 years. NOTE: it is important to apply for this before the expense is incurred.

Click on the name of the grant for more information.


Tuesday, 29 May 2012

Demolition videos - CBD Red Zone

Demolition News is the best demolition website on the internet. If it is demolition related, this is the place to look.

Part of the coverage provided by the site is videos of demolitions - successful or otherwise. Often there are videos of demolitions in the CBD, such as the one of Natcoll House here. The home page is here.

Monday, 28 May 2012

IAG – Part 2 of bad at playing nicely, or just misunderstood?

The first part of this post (here) outlined aspects of IAG's bad performance in Australasia. Some questions arise: has IAG fallen short in other areas of activity, and what might be motivating its current behaviour? Could it be that IAG is a business under pressure from its own shortcomings, and squeezing Canterbury policy holders to make up for it?

IAG  -  UK

IAG purchased insurance interests in the UK: Equity Red Star (Britain's fifth largest motor insurer) and insurance brokers Barnett & Barnett, a provider of commercial insurance broking and risk management services.

The venture was not a particularly good one, and financial losses occurred. In addition Equity Red Star did not conduct itself well and had failings in the way it managed parts of it’s operations. As reported by the Financial Times on the 3rd of January this year:

Lloyd’s of London has censured a member syndicate for the first time in almost a decade after uncovering failings in the way it managed its financial reserves and claims payments.

The shortfall required Insurance Australia Group, the owners, and private investors, or “names”, to inject hundreds of millions of pounds into the business.

Lloyd’s said on Tuesday that after an inquiry with the Financial Services Authority, the motor insurer had admitted to two charges of “detrimental conduct”.

Not only did the company fall short of market requirements, the whole purchase may have been a bad idea from the outset.

IAG are now looking at selling their UK operation. As Fox Business saw it on the 16th of May:

Commonwealth Bank of Australia analyst Ross Curran said the sale was a "belated admission of their massive strategic mistake" of buying into the U.K. in the first place. IAG's U.K. operation has cost the insurer more than 500 million Australian dollars over the past two years, he said.

"Their U.K. business has been unprofitable for 28 out of the last 30 years," said Curran. "It's unlikely to ever make a profit in IAG's hands for the future. The only problem is there won't be any buyers for these assets."

If the UK operations are anything to go by, IAG aren't always very clever in how they expand their market presence.

IAG  -  Financial Issues

Equity Red Star was bought by IAG for an estimated A$1.8 billion, now has a book value of A$600m, and might end up being sold for A$400m ( 21st May).  [click link to continue]