Friday 25th November 2016
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Suncorp Group's New Zealand arm, which has been raising premiums for general insurance, auto and residential insurance, can't yet say whether premiums will rise further as a result of the Kaikoura earthquake.
Suncorp's Vero brand has received more than 1,000 claims related to the magnitude 7.8 quake, which cut off the seaside town and damaged buildings in downtown Wellington.
"It’s too early to say what will happen to premiums as a result of the Kaikoura earthquake," said Adam Heath, executive general manager portfolio and products, Suncorp New Zealand. "The priority right now is to look after our customers who have been affected by the quake".
Suncorp NZ customers were already facing premium hikes "that are, on average, single-digit percentages" and were a result of "the increase in the frequency and cost of motor vehicle claims, rising construction costs affecting houses and increasing frequency and cost of portable devices in particular affecting contents policies," he said.
As the tally of damage rises, cross-party talks are underway ahead of the introduction to parliament next week of legislation to enable urgent repairs in the Kaikoura region, which Prime Minister John Key says is likely to be similar to that passed after the Christchurch quakes, allowing repair work to be fast-tracked.
Key said the people of Kaikoura are starting to realise the “enormity” of the task ahead.
Engineers are still checking buildings in Wellington. Three Wellington City Council buildings are being demolished and work has begun to demolish the office block at 61 Molesworth Street near the parliament. Wellington’s single largest office building, the 15-storey Asteron Centre with tenants including Inland Revenue and the Civil Aviation Authority, has also been evacuated. Hutt City Council said yesterday that part of Lower Hutt's Queensgate Shopping Centre may be demolished, including car parking and the Event Cinemas. A New World supermarket and part of the Angus Inn Hotel across from the complex were evacuated yesterday.
Vero has set up a temporary office in Kaikoura at the Craypot Café and Bar.
"The sooner people contact us, the sooner we can get on with carrying out any urgent work, and managing their claims," said Jimmy Higgins, executive general manager of claims. "We have many learnings from the Canterbury earthquake experience and our key goals are speed of response and communication to our customers.”
Vero had "strong reinsurance arrangements in place to cover all expected claims," he said.
Suncorp's shares fell immediately after the Nov. 14 earthquake but have since recovered to trade yesterday at A$12.43. The shares are up 2.4 percent this year. Last week general insurer Tower said the quake could shave up to $7.2 million from earnings, with the impact limited by its $700 million reinsurance programme, which has an excess of $10 million.
Tower's shares have been punished by investors this year who have questioned its ability to pay dividends after receiving more claims than expected in the Canterbury earthquakes in 2010 and 2011. They last traded at 75.5 cents and have tumbled 60 percent this year.
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