ICNZ News - October 2020

ICNZ News - October 2021

Kia Ora,

When the pandemic first plunged the country into lockdown in March 2020 insurers stepped into the unknown, adapted well to working from home, and continued to support their customers through the claims experience.

COVID-19’s viral twists and turns have not only changed New Zealand’s response to it, with more stringent response measures, but it is now also impacting insurance claims response timeframes due to aspects outside insurers control. Supply chain delays, a busy construction industry, shortage of tradies, availability of car parts, and appreciating car values are just some of the new challenges insurers are supporting their customers through. I delved into this topic in my September Insurance Business column which you can read here.

Last week Minister Clark announced an increase in the EQC cap, from $150k to $300k from October 2022 as policies renew, an increase that was not unexpected. ICNZ welcomes the transition period for the introduction of the new cap, which acknowledges the need for insurers and the EQC to re-arrange their reinsurance arrangements.

The new cap is a balance between the flat EQC rate every homeowner will pay regardless of the size, value, or location of their home and the risk-based price that the private insurance market must send. It will mean homeowners in lower seismic risk areas will pay a higher EQC levy when they currently pay a relatively lower risk-based pricing from private insurers.

Since the announcement, there has been much discussion about how this will affect insurance premiums and individual insurers will be working through the implications of these changes for the premiums they charge. While it is not appropriate for ICNZ to comment any further on this, it is important to note that house insurance policies provide cover for all perils including flooding, not just those covered by the EQC. Nor do we know what will happen to reinsurance costs for earthquake cover.

Ngā mihi,

Tim Grafton,

CE, Insurance Council of New Zealand (ICNZ)

Te reo Inihua – the language of insurance

As part of our work to reflect the diverse communities that the New Zealand insurance sector serves, ICNZ is committed to incorporating greater use of New Zealand’s official languages – including te reo Māori – into our work. So, for this year’s Te Wiki o Te Reo Māori, 13-19 Mahuru, (Māori Language Week, 13-19 September) we shared some of our most commonly used insurance terms in te reo Māori.

Latest research on fraud

IFB recently completed its annual research to see how much Kiwis know and understand about insurance fraud. The results have confirmed that a concerningly large number of Kiwis still do not understand the serious implications of insurance fraud and the potential impact it can have on all policyholders. Download the infographic for more insights.

Safer Boating week 18-24 October

Safer Boating Week is an important time to check you know how to stay safe on the water – whether as a new or experienced boatie. Make sure you have completed your local Coastguard boating course and obtain your Day Skipper certificate, and make sure you know how to comply with different COVID alert level restrictions for where you live. Read more.

July severe weather reaches $122m

Preliminary figures for the 16-19 July storm, that saw a rare red weather warning issued by MetService, has seen 5,207 claims made to date, with insurers supporting their customers with at least $122m for insured losses – $85m for Westport alone.

Christchurch June flood reaches $46m

The cost of insured losses from the widespread floods that affected the greater Canterbury region at the start of winter, 29 May – 1 June, has been finalised with insurers paying over $46m to support the recovery.

For a full breakdown of the types of claims and costs see our ‘Cost of natural disasters’ table.

In the news

Tower Insurance recently changed how it supports customers dealing with a total loss of their home from weather events, fires, and floods, and is now offering a payment of $15,000 to incentivise them to use more sustainable materials in their rebuilds.
To celebrate its 100th anniversary, MAS has released an online game of life board game ‘MAS moments’ to show how MAS is continuing to support Kiwis through life, from simple insurance needs to health insurance and income protection.
AIG New Zealand has been named a finalist in two categories in the ANZIIF New Zealand Insurance Industry Awards 2021 – General Insurance Company of the Year and Insurance Learning Program of the Year.
Last week CERT NZ issued an advisory on the 'parcel delivery' SMS scam - encouraging everyone to avoid clicking the link and to forward the txt to DIA’s anti-spam number 7726.