Vero wants private insurers to take the lead handling some claims involving New Zealand’s Earthquake Commission (EQC), to simplify the process following natural disasters.

It has called for a pilot program for shared properties, where cover by multiple insurers and the EQC adds to the complexity of handling claims.

“Vero has put to the Government and reinsurers suggestions regarding the management by private insurers of all aspects of selected shared-property earthquake claims,” Vero Insurance NZ CEO Gary Dransfield told the Trans-Tasman Business Circle in Wellington.

The streamlined approach would allow faster management of claims affecting thousands of people in Christchurch, according to Vero.

“It would also be a useful pilot of the type of innovative thinking and processes needed for any future natural disaster in New Zealand,” Mr Dransfield said.

Householders automatically receive EQC quake and natural disaster cover when they take out a home or contents fire insurance policy. Residential buildings are insured by the EQC for up to $NZ100,000 ($86,000) per dwelling. Property owners can then buy top-up cover from private insurers.

Vero says government agencies recognise the relative efficiency of private insurers’ claims management.

“We can improve recovery efficiency in Christchurch and any future crisis through harmonisation of claims management processes, agreement on apportionment methodology and increased involvement of private insurers in claims management,” Mr Dransfield said.

Vero has completed about 60% of the 20,000 claims it received following the Christchurch earthquakes, paying out more than $NZ2.2 billion ($1.9 billion).

About $NZ30 billion ($26 billion) of insurance money will flow into Canterbury during the recovery, representing about 15% of New Zealand’s gross domestic product and providing huge savings to the Government and taxpayers, Mr Dransfield says.

But he warns the insurance industry must do more to show the value it provides and its role in raising living standards. Insurance company productivity must improve, to ensure premiums remain affordable, and prices should better reflect risks covered, he says.