• Position on Wellington risks clarified

IAG - the country's largest home insurer - says it is continuing to offer new house and contents insurance in Wellington as commerce minister Kris Faafoi calls on insurers to give more information to the public.

Faafoi said he was meeting with insurance companies because he wanted them to reveal more about the availability of policies and risk-based decisions.

"I am aware there is an approach across the industry towards greater risk-based pricing and that some companies are being selective in offering policies," he told the Herald.

Earthquake minister Megan Woods earlier raised the issue, claiming IAG had shut up shop in the capital due to high earthquake risk.

She said while other insurers had moved to risk-based pricing, IAG was just not offering cover.

IAG had about 50 per cent of the Wellington market. Treasury officials met with IAG on Tuesday to seek assurances about the situation.

In response IAG said it had been taking a conservative approach to offering new insurance in the Wellington region for many years due to the high natural perils risk in that part of the country.

"Following the Kaikōura earthquake we undertook a conservative approach to providing insurance in Wellington due to high natural peril risk in the area," IAG New Zealand executive general manager Kevin Hughes said.

The company had since reviewed its approach to both new and existing customers and said cover would be considered on a case-by-case basis.

"IAG's approach to insurance is something we continue to assess. Taking into account feedback we've received from customers recently, we are looking to broaden our approach to new business in Wellington," Mr Hughes said.

The Herald understands IAG's move is isolated and other insurers are not expected to follow suit.

Private insurance is heavily linked to EQC cover as individuals must have private insurance to access EQC pay-outs for natural disasters.

From July EQC will cover the first $150k of damage up from $100k but will no longer cover contents insurance.

The EQC Act also includes a provision that means if someone can prove they can't get insurance privately it will step in to provide insurance for natural disasters directly.

Woods said it had not reached that situation yet but it was an area that would be looked at as part of a second phase review of the EQC Act.

Faafoi said he was meeting with insurance companies because he wanted to know more and to ask them to share more information with consumers about availability of policies and risk-based decisions.

"I have also requested information from officials so we can better understand the scale of the problem and consider any actions that might be needed."

 

 - NZ Herald



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