Insurance Council Of New Zealand(ICNZ) Supports Earthquake Commission(EQC) Act

The Insurance Council of New Zealand (ICNZ ) has expressed its support for the changes to the Earthquake Commission (EQC) Act announced by the government.

The announcement is the first step in improving the EQC and its responsiveness to major disasters, ICNZ chief executive officer Tim Grafton said.

“We support the changes announced by the minister and are hopeful that lessons learned from the upcoming inquiry into EQC will lead to further change,” he said.

In the announcement, Minister Responsible for the Earthquake Commission Megan Woods outlined the changes, which include:

Increasing the cap limit on EQC residential building cover to $150,000 (plus GST);

Enabling EQC to accept claim notifications for up to two years after a natural disaster, rather than the current three-month time limit for such notifications;

Removing EQC insurance cover for contents;

Clarifying EQC’s authority to share information to support the implementation of the EQC Act and settlement of insurance claims and where this is in the public interest and safety (a
recommendation of the Canterbury Earthquakes Royal Commission).

“The lifting of EQC cover to $150,000 (plus GST) acknowledges the fact there has been no change in the level of cover provided in the act since 1993,” Grafton said. “The transfer of contents insurance from EQC to private insurers logically reflects the need to focus EQC cover on what is most needed after a disaster: rehousing people.”

He also pointed out the proposal to clarify that EQC can share information with insurers to assist in the settlement of insurance claims as an important provision. “The last thing that’s needed when you are trying to settle claims after a catastrophe is bureaucratic hurdles creating delays when information sharing is essential to speed recovery and safeguard people,” he said.

However, he added, there is still further work required around the management of claims.

“We believe insurers should manage and settle all claims, including those under cap, as agents for EQC,” he said.

“It’s insurers who have the relationships with customers and the bulk of resources, and will already be involved in settling contents claims in any event.

This arrangement has been tested and proven by the response to the Kaikōura earthquake, the recovery of which has progressed far more smoothly and efficiently than was seen in Canterbury.”

With The Help Of Chatbots, "Bionic Brokers" Are Being Created

Half-human, half-computer, the bionic broker uses virtual assistants to be ‘open’ to potential customers at all times of the day and build the right quote for them whenever they want it.

The next Marvel movie might not feature this superhero, but as more insurers look at integrating chatbots into their businesses, the bionic broker might become an industry standard within a few years.

An EY report on intelligent virtual assistants stated that 80% of companies are already using or plan to use chatbots by 2020. Insurance carriers can use these digital assistants to “optimize the customer experience, increase revenue, lower costs and enhance risk management,” according to EY, while giving customers access to a simple, intuitive interface that navigates them through an insurer’s offerings.

Finding the right chatbot that fits with an insurer’s needs and their clients’ preferences requires some trial and error. John McClelland, founder of miBroker, has already tested two iterations of chatbots and plans to release a third one soon.

He’s a fan of the technology.

“We find that they’re more engaging than a simple web form,” he explained. “A lot of the stuff we do with insurance is very transactional in nature. People are going to rush and they’re going to want to get the quote as quickly as possible. Especially if you’re talking auto insurance, people are very price-sensitive.”

Before installing a chatbot, a broker has to consider how they want to reach their clients. The first version of miBroker’s chatbot was specific to Facebook Messenger.
McClelland said they ran into challenges since not all users are on the platform.

The second iteration used a landing platform separate from Facebook, but managing expectations was one of the challenges there.

The chatbot didn’t offer live quoting, so after the customer entered all their information, they couldn’t get an immediate price back from the bot. Instead, a broker would call or email the client shortly after with that quote.

Nonetheless, McClelland has persisted with chatbots and is now working on miBroker’s next version. The benefits he sees outweigh the hurdles encountered along the way.

“The chatbot can always be live and always be attentive, which is really challenging for smaller brokerages,” he said. “It’s a level of service we wouldn’t be able to provide if we weren’t using the chatbots.”

The virtual assistants aren’t here to take the place of people on the ground entirely. The key in the bionic broker makeup is that there’s still a human component.

“We don’t look at it as replacing the broker,” said the miBroker founder. “It’s really about making them a bionic broker so they can use chatbots to have better conversations with their customers.”

"Common Sense" Changes Made to EQC Act - Minister

The Minister responsible for the Earthquake Commission, Megan Woods has announced changes to the Earthquake Commission (EQC) scheme that will simplify and speed up the claims process.

According to Woods, the Cabinet carefully considered the proposals regarding changes to the EQC Act, which aims to improve how the Act functions and enable the scheme to work more effectively for future natural disasters.

“These are widely agreed, common sense changes that can be made before the independent inquiry into EQC.

I’ve asked for them to be brought forward so that, if the worst did happen and we had a major event shortly, these changes will have been made,” she said.

The changes will also resolve issues with the EQC Act that have previously been identified by the Ombudsman and the Canterbury Earthquakes Royal Commission.

Woods outlined the changes, which include:

Increasing the cap limit on EQC residential building cover to $150,000 (plus GST);

Enabling EQC to accept claim notifications for up to two years after a natural disaster, rather than the current three-month time limit for such notifications;

Removing EQC insurance cover for contents;

Clarifying EQC’s authority to share information to support the implementation of the EQC Act and settlement of insurance claims and where this is in the public interest and safety (A
recommendation of the Canterbury Earthquakes Royal Commission).


The Minister said that removing cover for contents will increase EQC’s ability to allocate more resources when responding to a natural disaster and help reduce any delays in resolving residential building and land damage claims.

“Government has talked to the insurers and the indication is that private insurance cover for contents will continue to be available at a reasonable cost,” she noted.

The removal of cover for content and the increase to the cap limit for EQC residential building cover will come into effect on July 1, 2019. Ministers have discussed this timing with Treasury, EQC and the Insurance Council of New Zealand (ICNZ ).

“These are changes that can be made now without.having to wait for the outcome of the upcoming inquiry,” Woods added.

All of the proposed changes are still be subject to the New Zealand legislative process with the passage of the legislation expected by the end of December.

Gallagher Basset, New Zealand Announces New Appointments

Gallagher Bassett (GB) has announced the appointment of Tim Allan as its new operations manager – property assessment.

Allan joined Symetri (now a GB company) in 2011, as an assessor of damaged driveways following the 2010 Christchurch earthquake. He progressed into a number of roles within project management and leadership, in which he gained a thorough understanding of property assessment and insurance.

In his new role, Allan will be responsible for providing day-to-day management and technical support to the property assessing team, ensuring the delivery of a cost-effective, professional and customer-focused claims service.

“Tim encapsulates our culture of leading by example, being accountable and continually delivering the best for our customers both internally and externally,” said Katherine Johnson, GB general manager of general insurance.

Allan holds a national certificate in carpentry and is a licensed builder practitioner. He also has extensive health and safety qualifications throughSite Safe.

Business In New Zealand Less Confident In Managing Cyber Threat

Few New Zealand businesses are confident in understanding or responding to a cyber incident, nor do they fully comprehend the risks their suppliers pose to them, a new survey conducted by Marsh and Microsoft shows.

While 60% of the survey’s New Zealand respondents said cyber incidents were in their top five risks, only 22% said they were highly confident in managing, responding and recovering from a cyber incident and 35% in understanding and assessing their cyber risks.

Further, 43% of respondents did not assess the cyber risks of their vendors or suppliers and 20% did not know if they were even exposed to any risks from their supply chain.

The survey findings were discussed at a Marsh cyber risk breakfast in Auckland this morning.

“Cyber risk is a topic that has been talked about for some time given our increasing dependence on technology,” said Fred Boles, Marsh head of specialties.

“It is therefore surprising that many organisations are still unaware what their cyber risks are including the risks that suppliers pose.”

Only 33% of respondents in New Zealand had developed a cyber incident response plan in the last 12 to 24 months. Of those who didn’t have a plan in place, 32% were unsure as to why this was the case.

“As with any major business risks, preparedness is the
key to managing them.

“Organisations can more effectively manage cyber risk by applying a holistic, comprehensive approach that emphasises proven security practices, such as updating systems regularly, along with other preventative measures including planning that engages key stakeholders,” Boles said.

The Global Cyber Risk Perception Survey had more than 1,300 executive responses coming from 26 industries.

FSC Welcomes Code of Conduct Consultation

The Financial Services Council (FSC) has welcomed the release of the draft code of conduct for advisers, saying the council has a very clear mandate to respond to all regulatory changes and will definitely be a voice for its members and the industry.

FSC chief executive Richard Klipin said the intent of this regulatory and legislative change is to make the landscape of financial advice more accessible for all New Zealanders, and the quality of that advice need to go up too.

“Both of those twin measures are important to acknowledge and are also an important benchmark to set any changes against, will there be more advice for New Zealanders?” he said.

“And will the quality go up? And in that context, we absolutely welcome the landing of the draft code of consultation. There is significant change in this regulatory for advisers and for the people who provide the products and services that they (advisers) advice on, and that clearly affects the members of the FSC.

There are significant implications across the financial services spectrum, which obviously include the advice piece but is not limited to the advice piece.

“Change management and transition management are going to be two core skill sets that are required as we go through this change. So, the FSC sees its role as working very closely with government, with the regulator, with MBIE, with the code working group to help the industry management this transition and change,” Klipin added.

Last year, the FSC ran a roadshow in with the FMA, MBIE and the code working group, which went out to about 700 advisers.

Klipin said this helped to disseminate information, educate the community and encourage debate so that advisers understand what the changes are, why they’re in place and what the impacts are.

“That’s a key part of what we see our role as, and also, we see our role as having a voice in terms of crafting ultimately what the final legislation and code will look like. That’s why we spend a lot of time crafting regulatory responses,” he said.

“There’s lot of support out there (for advisers), and there needs to continue to be support coming from all parts of industry. I think collectively the mind-set is, we know the industry is going through change, we need to help people manage this change.

“There people (advisers) that are going to be impacted by change, and of course it’s up to all of us to get involved in whatever is changing. So, that’s thinking through issues such as what does the prospective legislation look like? What impact will it have on my future business model? What’s the future going to look like? How can I craft a value proposition that lasts in a sustainable away?”

The message from the FSC that its best to lead this discussion and get in there early, and while we don’t know where the final landing spot is important to be involved and engaged, Klipin said.

Last week, Commerce and Consumer Affairs Minister Kris Faafoi welcomed the beginning of the public.consultation on a new code of conduct.

Faafoi said the code of conduct was one of a range of significant changes under the proposed the Financial Services Legislation Amendment Bill (FSLAB), which is currently before select committee.

“Under the Bill, all financial advice to everyday clients will have to meet standards of conduct and competency,” he said. “This is really important because we know that small changes to investments or savings can ultimately make a big difference, for example to funds saved for retirement.

“This really affects people’s ultimate quality of life – sowe do want to ensure the advice is as good as it can be to enable the best outcomes.”

Faafoi said he hopes those who give financial advice.will get involved to ensure the new code will be manageable both for advisers and consumers.

Once the new code of conduct has been approved, businesses will have about nine months to get a transitional licence. Businesses will then have two years to become fully licensed.

More Females As Brokers In The Industry Than Ever Before

Rothbury Insurance Broker Maria Jamison discusses diversity, what the insurance industry is doing to encourage women in the industry and the #metoo campaign.

What’s it like being a female adviser in the insurance industry?

In my experience there’s not a lot of focus on whether you’re a male or female broker. What I’ve found is people are more concerned about whether they’re working with someone who knows what they’re talking about rather than what gender you are.

Do you think there’s enough focus in the industry on
increasing gender diversity?

I think there are more female insurance brokers in the industry than ever before, so it’s probably heading in the right direction. It would be good to see more women in management roles though.

Insurance has always been a pretty male-dominated industry, but more women are entering the industry. Why do you think this is?

There are probably a few reasons for this; young women are not afraid to measure themselves against their male counterparts and men in general know women are equally capable of doing the same job as them.

I also think it’s generally accepted that women bring different aspects to the industry and that’s a good thing.

The industry has also been focusing on promoting insurance as a viable and rewarding career path.

There’s a lot of attention in the media about the #metoo and Time’s Up campaigns, as well as numerous local
sexual harassment stories in the workplace. How do you think the insurance industry fares on this?

I think it can happen anywhere though, but most companies today have a zero-tolerance policy (on any sort of harassment).

So, I hope this is empowering women to come forward and speak up if they feel they’re being unfairly treated, discriminated against or subjected to any form of sexual harassment.

Can you discuss a client experience where being a woman has helped you with an application, claim or challenging situation?

I have quite a few female clients and in all honesty, I think women sometimes prefer to deal with women because they feel more comfortable sharing personal information. There’s also a certain level of empathy and understanding intrinsically between women.

What advice would you give a young woman wanting to become an insurance broker?

I say go for it! Most women have a natural ability to build relationships with those around them. This is absolutely the most important part of being an insurance broker.

Most people can learn the technical aspects of insurance but being able to build relationships, have empathy for people and want to help them, is what makes a great insurance broker, and those are qualities many women have.

What advice would you give the younger you?

Have the confidence to back yourself and don’t ever doubt your own ability. Find someone who can be a mentor to you and learn as much as you can from them.

Don’t be afraid to ask questions and question things. Be generous and kind when dealing with other people, and most of all believe in yourself.

Do you think there is enough focus on career development and professional growth for women in the insurance sector?

I have found if you are willing to develop and grow your career there are a lot of opportunities and support out there. I’m fortunate that Rothbury is especiallysupportive in this area – you just need to put your handup for the opportunity.

Council Reveals Flood Study For Mangatärere Stream

The Greater Wellington Regional Council has released an updated study into flood-prone areas near the Mangatārere Stream near Carterton.

“Although the flood information is preliminary, we thought it was important to make the community aware of it,” Greater Wellington Councillor Adrienne Staples said. “It’s important for the district council and the community to have the latest data on the flood hazard presented by the stream.”

The study, which provides interim flood hazard information, will be vital for the decision making by the district council on regulation, land use and development and for people undertaking private developments.

“Greater Wellington and Carterton District Council’s focus will be on advising people, recommending building floor levels and dissuading inappropriate development that could be at risk from flooding,” she said.

The maps arising from the flood study area finalise a 2014 report for Greater Wellington by Opus International Consulting. They suggest that developed areas in Carterton could be at risk, primarily along the Mangatārere Stream and old river channels, which have flooded in the past.

“Naturally, some people will be concerned about their property being shown in the flood study area,” Staples said.

“We are sensitive to people's concerns and we'll be sending out information to explain what the flood study area means and how it could affect them. We also want to involve the community in assessing the hazard in more detail in the next phase and I hope that people will take the opportunities to get involved.”

The council said the work is a precursor to a full flood hazard assessment. It represents a sensible compromise that allows Greater Wellington and Carterton District Council to communicate the potential flood hazard while indicating there is further investigation to be undertaken.

The more detailed flood hazard assessment is scheduled for completion by 2020.

Depending on the outcome of the flood hazard assessment, a floodplain management plan will probably follow to further the flood-risk management.

Carterton District Council planning and regulatory manager Dave Gittings, meanwhile, welcomed the new flood study.

“We are looking forward to working with Greater Wellington to move towards a more precise model, which will ultimately introduce flood protection to minimise hazard to the community,” hesaid.