Monday 23rd April 2012
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AMI Insurance, the Christchurch-based firm that was forced to seek a government bailout in the wake of the Canterbury earthquakes, said its chief executive John Balmforth will step down after 17 years at the company’s helm.
In December, Insured Australian Group agreed to buy AMI for $380 million, the culmination of AMI’s search for new capital after the Canterbury earthquakes drained its reserves and drove up reinsurance costs, leading to a government bailout.
“We have appreciated the passion and commitment demonstrated through the sale and purchase process and the contribution John has made as we have welcomed AMI to the IAG family,” said Jacki Johnson, chief executive at IAG.
IAG will immediately start a process to identify and appoint an executive general manager.
Balmforth was in charge at AMI when it built up a portfolio of insured properties which critics later said were too concentrated in one market, Christchurch, contributing to the $705 million loss that saw the company reach out to the government for taxpayer support.
His tenure sparked controversy last September when it was disclosed he took home a salary of nearly $1 million in 2011.
The payment comprised a salary of $869,369 and a bonus of $122,700, which related to the previous financial year’s performance, before the first of a series of major quakes wrecked the country’s second largest city.
Around 18 percent of AMI’s exposure was in the Christchurch market, despite only 9 percent of the country’s population living there. Christchurch had not been previously considered high risk for earthquakes, compared with other parts of New Zealand.
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