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EQC told to speed settlements through claims, data shake-up

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New Zealand’s Earthquake Commission (EQC) has been urged to overhaul its data, employ an extra claims team and improve communication to speed settlement of remaining Canterbury claims.

Independent Ministerial Adviser Christine Stevenson proposes creating an EQC data quality group, and says the state-owned insurer should have a small team to sort, review, confirm and capture key information from all physical claims files.

“Multiple methodologies and processes appear to have been used to collect and report on claim numbers, with ‘no single source of truth’,” Ms Stevenson says. “I have been unable to obtain reliable data on the exact number and status of the claims left to be resolved.”

About 2600 EQC claims from the 2010/11 earthquakes remained unresolved in February, with small numbers continuing to be lodged.

When claims pass $NZ100,000 ($91,893) plus GST, they are passed to the private sector.

The Insurance Council of New Zealand (ICNZ) says private insurers have received 945 “over-cap” claims from the EQC in the past year and 1864 in the past two years.

“It is simply not acceptable to still be receiving completely new claims seven years on from the Canterbury quakes,” Tower CEO Richard Harding said.

“Recent reports of the EQC finding an additional 949 open, unresolved earthquake claims highlights just how broken the system is and the challenges we have faced trying to understand how many claims remain.”

Ms Stevenson’s report proposes employing an extra claims settlement team in the EQC’s Canterbury Business Unit, which in April shifted to a case management approach.

It recommends regular meetings with each private insurer and more work exploring whether a new entity, involving private and public insurers, should handle new Canterbury-related claims.

ICNZ has welcomed the report’s acknowledgement of process improvements after the Kaikoura quake, which reduced claims double handling by the EQC and private insurers.

“The settlement of unresolved EQC claims now and in the future is a priority for homeowners and private insurers,” ICNZ CEO Tim Grafton said.

EQC Minister Megan Woods said: “It’s clear there’s a big job to do to get these claims moving faster, but the report contains some very good recommendations… to improve the way the EQC operates, get claims sorted and to help people move on with their lives.”