Just a quick post about Christchurch and the insurance shambles. IAG today reported an increase in profit after tax of 59%, to Australian $1.23B. IAG owns three New Zealand insurance providers – State, AMI and NZI. Here’s how customers ranked those insurers at Insurance Watch:
Also in the report they said that they have settled 58% of their claims in Christchurch. Of course, the other way of putting that would be that almost 4 years after the first quake, a company that is reporting a 59% increase in after tax profit still hasn’t settled 42% of their claims in the city. 42%! And to be honest, after 4 years, I think that 4.2% would still be too high. People have paid their premiums to these companies for years, for one purpose – to be insured in the event of a disaster. For a company to still have 42% of their claims unsettled, and at the same time, be reporting a 59% increase in profits, shows that the insurance market isn’t working for the people of Christchurch.
This is what can happen when you have your biggest insurer running out of Sydney. Labour would establish KiwiAssure to stop these profits going off-shore. We would also set up an insurance court; it would cost just $1 million to set up, and would speed up the resolution of these claims. The next time you hear the insurance industry criticising these sort of attempts to fix their industry, remember those numbers. 59% increase in profit; 42% of claims unsettled 4 years on.