The Earthquake Commission (EQC) and private insurers’ new partnership will provide an improved, more collaborative approach to supporting New Zealanders through natural disasters in the future.
Under the new partnership, anyone with home insurance whose home or land is damaged in a natural disaster will only need to lodge one claim through their private insurer.
“These arrangements will ensure that customers can deal with their insurer who will assess, manage and settle their claim,” Insurance Council of NZ chief executive Tim Grafton said.
“This will ensure a more effective and efficient response, delivering simplicity and certainty for customers.
“Customers must always come first and developing these arrangements in partnership with EQC will ensure NZ has one of the best natural disaster response platforms in the world.”
Eight private insurance companies – FMG, AA Insurance, Chubb, Ando (Hollard), IAG, MAS, Vero and Tower – have worked with EQC on the partnership model with a singular focus on improved customer outcomes.
EQC chief executive Sid Miller says the partnership builds on the model used following the Kaikoura earthquake and more recently in responding to the Northland floods in August.
“The response to the Canterbury earthquakes highlighted that NZ’s dual insurance system meant customers had to make two claims; one to EQC up to a capped level of the damage and the other to their private insurer for top-up cover losses.
“This was inefficient and frustrating for our customers,” Miller said.
Under the new agreements, private insurers will manage the total claim, including the EQC portion up to the statutory capped level of damage, and then any claim under their private insurance to cover additional losses up to their sum insured. Under the partnership, insurers will also provide data to EQC about where insured homes are located so EQC can better model its exposure to natural hazards.
The new approach builds on the findings from the Government’s Public Inquiry into EQC, as well as the lessons learned from the Canterbury and Kaikoura earthquakes.
“We know that EQC cannot respond to a large, natural hazard event alone, and this new partnership will streamline the insurance process and ensure we make best use of existing sector capability and expertise to meet the needs of New Zealanders when the next natural disaster occurs,” Miller said.
“Once set up, it will double our capacity to manage claims from a natural disaster.
“This much improved customer experience, improved data sharing and increased claims capacity is a milestone for improving our readiness to deal with future natural hazard events.”
Leading rural insurer FMG says the Natural Disaster Response Model (NDRM) is great news for farmers and rural communities.
FMG chief product and pricing, underwriting and claims officer Nathan Barrett says FMG has been a strong advocate for the NDRM following the 2010 Canterbury earthquakes, instigating discussions for this change.
“With this new model, if our clients are impacted by a natural disaster and need to make a claim, all they need to do is contact us,” he said.
“At an already stressful time, we’re now able to make the road to recovery much simpler.”
FMG, together with other private insurers are working with EQC on a partnership to deliver the NDRM.
“After the 2016 Kaikoura earthquake we had a temporary agreement to manage claims on behalf of EQC and we know from many of our clients that this worked well for them,” he said.
When the change comes into effect Barrett says FMG will act as an agent for EQC and will add to its claims and assessing teams to support this.
“We want to make sure our employees are supported and that we continue to offer the same level of service to our clients,” he said.
The new model is expected to be in place from the second quarter of 2021.
Meantime, EQC is working with individual insurers to satisfy requirements needed for the model.
