Storms that ravaged parts of New Zealand’s North Island have helped to expose inefficiencies in the country’s infrastructure and trades network, according to the Insurance Council of New Zealand (ICNZ).

ICNZ CEO Chris Ryan told Sunrise Exchange News that now the country is cleaning up after the wild storms, several issues, including the lack of tradespeople, have been brought to the Government’s attention.

“The industry has come through the storms reasonably well,” he said. “We haven’t heard of anyone pointing the finger at the industry (but) people are mostly angry with local authorities for not providing the proper infrastructure to overcome such a disaster.” 

Mr Ryan said that since the NZ Government cancelled the country’s trade apprenticeship scheme, there is now a lack of qualified plumbers, builders and electricians. “The Government has signalled its interest in boosting trades education so we don’t see a repeat the next time something like this occurs.”

But Australasian Institute of Chartered Loss Adjusters (AICLA) President Mark Godfrey says issues surrounding the storm run much deeper than just a shortage of tradespeople. The AICLA chief says independent loss adjusters aren’t being used properly because the industry doesn’t have a disaster response organisation.

“At the moment, for example, three different loss adjusters may be representing three different insurers in the one street and then they’ll spend a day travelling to another street where they’ll start all over again,” Mr Godfrey said. “It’s just not efficient.”

He says the NZ Earthquake Commission disaster response facility, which is in place to deal with an inevitable Wellington earthquake, is a perfect example of what the local general insurance industry should have in place.”

But Mr Godfrey is sceptical such a facility will ever gain the political backing to get off the ground, especially if it’s not in the interests of the two insurers dominating the market. “I can’t say there will be a perfect disaster system when there are really only two major players in the industry,” he said. “We do however recognise how difficult it is to manage such a system in light of current market conditions.” 

Despite criticisms of how the industry managed loss adjusters’ expertise throughout the disaster, Mr Godfrey warns the situation “certainly isn‘t the worst we’ll see considering the scale of the event and the lack of resources”.

Vero has already announced a damage bill of $12 million and that could go as high as $20 million as claims continue to come in. Market leader IAG NZ isn’t declaring a figure but has confirmed it has already received about 3500 claims.