Vero has called for debate on how New Zealand handles disaster insurance, after releasing a report that finds the dual insurance model, unclear protocols, co-ordination issues and time taken to understand land changes delayed claims settlements following the Canterbury earthquakes.

Vero NZ CEO Gary Dransfield says customers want a much simpler and more efficient process, particularly around claims management.

The government-owned Earthquake Commission (EQC) has responded to the research by Deloitte Access Economics, with CEO Ian Simpson welcoming the call for discussion.

But he says the EQC is managing 85% of all domestic property claims and private insurers are handling just 15%.

“Were private insurers to lead on all claims, they would have had to complete six times more assessments than they are doing at the moment.”

The EQC pays the first $NZ100,000 ($96,658) of a house claim and $NZ20,000 ($19,332) for contents, then passes on any over-cap payment to the private insurer. The Deloitte report finds the overlap between state and private insurers has had a significant impact on timely claims resolution.

Settlements were also delayed by the complexity of the earthquakes, with insurers and the EQC having to seek court judgements on issues such as how damage was apportioned between them and between different events.

The Christchurch CBD was cordoned off for two years and there was legal action on the amount of building strengthening councils could require, plus uncertainty about compulsory acquisition of land.

Vero received 31,050 earthquake claims valued at almost $NZ4.8 billion ($4.64 billion) after reinsurance recoveries.

Mr Dransfield says the 85% to 15% split cited by the EQC is too simplistic, given that private insurers cover EQC exclusions such as damage to driveways, fences, retaining walls and pools.

Homeowners had multiple organisations assessing damage and there could be a difference between assessments by the EQC and insurer, plus the owner’s view.

While a solution is not immediately obvious, “I think we know where the difficulties lie”, Mr Dransfield told insuranceNEWS.com.au.

New Zealand needs a streamlined model that enables people and communities to recover from disasters and that also works for the economy, he says.

The report also has lessons on how to improve claims handling.

Vero set up a dedicated earthquake program in April 2012, which enabled it to maintain stronger strategic oversight of its response and greater control over how it worked with outside agencies.

In October 2012 it moved its earthquake program “towards a more communicative and customer-centric model in an effort to expedite residential claims in particular”.

It increased its local presence, hiring senior and experienced case managers and relocating claims from Auckland to Canterbury.

From February 2013 each policyholder had a case manager, so people had a person to contact rather than a call centre.