Tower chairman frustrated by holdouts
Tower chairman Michael Stiassny has criticised some Canterbury earthquake victims for holding out on settlements to ‘‘maximise’’ their insurance claims.
Stiassny showed his frustration in reply to a question at Tower’s annual meeting yesterday.
Speaking after the meeting, Stiassny said there was an industry of lawyers and engineers ‘‘making it their business to take claims to court’’.
He said many people in Christchurch had been ‘‘through hell’’, but said among the remaining claims yet to be settled were people seeking to ‘‘maximise’’ their returns from Tower.
‘‘A number of these people are not in any form of hardship, and are basically engaging in actions to maximise returns,’’ Stiassny said.
‘‘That’s what I’m entitled to be aggrieved about as chairman of an insurance company.’’
It was in Tower’s interests in some cases to settle to bring these cases to an end, However, Stiassy said, ‘‘It’s not our job to pay over the odds.’’
Tower’s job was to pay what was fair to policyholders, he said.
Some of the holdouts were living overseas, he said.
Tower’s financial performance continues to be dogged by the legacy of the Canterbury quakes. The NZX-listed company reported a loss in the year to the end of September 2016 of $21.5 million.
Chief executive Richard Harding said there had been a $25.3m impact from additional provisions for Canterbury, as the Earthquake Commission (EQC) discovered more ‘‘overcap’’ claims more than six years after the earthquakes.
EQC pays the first $100,000 plus GST of earthquake claims on house insurance. If damage costs more than that to fix, the claim is ‘‘overcap’’ and homeowners’ private insurance kicks in.
‘‘The legacy from the Canterbury earthquakes remains a difficult and complex situation,’’ Harding said.
‘‘Six years on, insurers still do not have clarity on the number and value of claims that remain.’’
Stiassny called the appearance of overcap claims six years after the earthquakes ‘‘amazing and disappointing’’.
Dealing with Kaikoura quake claims was simpler as all policies were now ‘‘sum assured’’ policies, where insurers have a maximum liability, and usually settle claims for cash payments.
There is uncertainty over Tower’s future as Australian insurer Suncorp and Fairfax Financial Holdings have made bids to buy it.