Pressure for change
14 Aug 2017
The insurance industry continues to advocate for change as the government reviews the EQC Act. A number of key changes are seen as essential to improve customer experience. In their latest newsletter ICNZ states their case for change.
ICNZ continues to advocate for private insurers to manage earthquake claims.
The Government has said that it intends that EQC no longer handle contents claims and that land damage will be focused on what needs to be done to enable a building platform for a house post event. This means that insurers will be handling claims after any event, so we see no benefit for insurance customers to have another party involved.
From the homeowners’ perspective, they will want a single point of contact, end-to-end service that provides an efficient insurance claims assessment and settlement process as well as a simpler experience.
This approach is no different than exists world-wide where insurers take responsibility for managing and settling claims on behalf of the reinsurers who bear that bulk of the costs from a natural disaster.
We see EQC functioning in much the same way as the reinsurer, by having insurers act as their agents and having full audit rights and sanctions for any inappropriate allocation of costs.
We believe Government needs to direct that insurers manage claims rather than leave it to EQC to decide post-event if it would like that arrangement and find that only some or possibly no insurers want to engage.
It makes no sense for EQC, whose pre-Canterbury staff levels were 22, to have the responsibility for managing claims when the business-as-usual state for insurers is to manage and settle well over a million claims a year on a 24/7 basis.