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EQC apologises ‘unreservedly’ for stressing customers

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New Zealand’s Earthquake Commission (EQC) has formally apologised for “compounding the stress of customers” affected by the devastating Canterbury earthquakes.

The state-owned organisation is the subject of a public inquiry into its operational practices and claims approaches following the 2010-11 quakes.

“We recognise the shortcomings in our response to the Canterbury earthquake sequence, and that they have had a significant negative effect on our customers, their families, the wider Canterbury community and our staff,” Chairman Michael Cullen said.

“For that we unreservedly apologise.”

EQC was slow to adapt and respond to changing circumstances during the unprecedented 2010-11 events and was not as easy to deal with as it should have been, Sir Michael says in the apology in the annual report tabled in the New Zealand Parliament today.

The public inquiry chaired by Dame Silvia Cartwright is due to make recommendations next year.

Sir Michael says EQC gathered a comprehensive set of information on what happened and how the organisation has since evolved to support the inquiry.

“It has put into perspective just how much the scale of the Canterbury earthquake sequence tested EQC’s processes and capabilities and overwhelmed us,” he said.

“It is clear that EQC became an additional source of stress for many of our customers, compounding the stress that was already present as a result of the ongoing earthquakes.”

EQC has previously apologised for shortcomings, but Sir Michael, who was appointed chairman last October, says the latest annual report is an opportunity to demonstrate it is determined to do better.

Settling outstanding Canterbury claims remains EQC’s top priority.

The report says 84% of remaining claims open at June 30 last year were resolved, against a target of 98%, leaving 556 of those claims remaining.

Total claims open fell to 2588 at the end of June this year from 4800 a year earlier, in a period when around 6600 claims were reopened and around 8200 reopened claims were resolved.

Improved case management has seen 80% of the claims reopened this year processed and closed within six months.

EQC is working to rebuild its Natural Disaster Fund, depleted by the Canterbury quakes and the 2016 Kaikoura earthquakes, and last year drew on its government guarantee for the first time.

The insurer received $NZ125 million ($115.7 million), excluding GST over three tranches to continue the claims settlement program.

CEO Sid Miller says EQC has begun implementing a model to ensure it is well placed to respond to a variety of future events of different magnitudes.

“We will do this by having in place a right-sized organisation, and a series of third-party contracts and partnerships, all of which will be able to respond as required,” he said.