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Suncorp, EQC agree to settle Canterbury claims cost

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Suncorp announced today it has reached an agreement with New Zealand’s Earthquake Commission (EQC) to settle cost allocations for claims arising from the 2010 and 2011 Canterbury earthquakes.

The matter of cost allocations arose because of a series of earthquakes that struck the region between the two disasters. The situation caused a number of complexities in calculating building and land damage plus the cost of repair between the different earthquake events.

The agreement to resolve the matter was formalised last month and came about after negotiations between EQC and Suncorp’s New Zealand arm, which includes Vero Insurance and AA Insurance. AA Insurance is a joint venture partnership between Vero and the New Zealand Automobile Association.

“This is the first agreement of its kind between EQC and a private insurer with respect to the Canterbury earthquakes and is a significant milestone for EQC, Vero and AA Insurance in the Canterbury Earthquake recovery programs,” EQC CEO Sid Miller said.

Suncorp New Zealand CEO Jimmy Higgins says the agreement is an example of how the insurer is focused on working collaboratively with EQC and the industry to tackle still-existing issues from the Canterbury disasters.

“Resolving these costs with EQC without resorting to costly and time-consuming court proceedings enables both organisations to move forward with work that will deliver better outcomes for our customers,” Mr Higgins said.

What Suncorp has learned from the Canterbury events would be used to improve customer support in future disasters, he added.

“Our team has worked closely with the Earthquake Commission on new and better ways to support customers during a disaster,” Mr Higgins said.

“The new natural disaster response model announced by EQC and the insurance industry … was a really important step in this journey and I’m really proud to see both of these agreements come to fruition.”

Under the new response model that was announced this month, private insurers will handle claims for policyholders following natural disasters.

Vero and AA Insurance are among the insurers that worked with EQC to develop the model, which will come into effect in the second quarter of next year.

“Vero has been a strong advocate for this model and the team there has worked hard to support the design and testing of new approaches to natural disasters,” EQC’s Mr Miller said.