We examine the role of business interruption insurance in business recovery following the Christchurch earthquake in 2011 in the short- and medium-term. In the short-term analysis, we ask whether insurance increases the likelihood of business survival in the aftermath of a disaster. We find only weak evidence that those firms that had incurred damage, but were covered by business interruption insurance, had higher likelihood of survival post-quake compared with those firms that did not have insurance. This absence of evidence may reflect the high degree of uncertainty in the months following the 2011 earthquake and the multiplicity of severe aftershocks. For the medium-term, our results show a more explicit role for insurance in the aftermath of a disaster. Firms with business interruption insurance have a higher probability of increasing productivity and improved performance following a catastrophe. Furthermore, our results show that those organisations that receive prompt and full payments of their claims have a better recovery, in terms of profitability and a subjective ‘”better off” measure’ than those that had protracted or inadequate claim payments (less than 80% of the claim paid within 2.5 years). Interestingly, the latter group does worse than those organisations that had damage but no insurance coverage. This analysis strongly indicates the importance not only of good insurance coverage, but of an insurance system that also delivers prompt claim payments. As a first paper attempting to empirically identify a causal effect of insurance on business recovery, we also emphasize some caveats to our analysis.
Two Christchurch Scout groups say their national body is refusing to give them insurance payouts for earthquake damage.
The insurance company, Tower, has strongly criticised the time it's taking to settle Canterbury earthquake claims and says the insurance system for handling such disasters is broken.
Listed general insurance company Tower has reported a bigger first half loss on lingering Canterbury earthquake claims and a write down in its computer systrems.
Insurance company Tower says yesterday's earthquake in North Canterbury will cost it a maximum of just over seven million dollars.
The insurance company, Tower, is confident that putting its costly and complex outstanding Canterbury earthquake claims into a separate company will allow the rest of the group to flourish.
Shares in the insurance company, Tower, have plunged close to 20 percent today after it said its profits will likely fall more than 16-million dollars because of Canterbury earthquake claims.
A story submitted by Jo Wicken to the QuakeStories website.
A video of a presentation by Hugh Cowan, General Manager of Reinsurance, Research and Education at EQC, during a panel at the 2016 Seismics in the City Conference. The panel has three themes:A City on the Move: Collaboration and Regeneration: "'Christchurch is now moving rapidly from the recovery phase into a regeneration stage with Central and Local Government working with the wider community, including the business community to ensure we get optimal outcomes for greater Christchurch' (CECC)."Looking Back: Remembering and Learning: "What are the milestones? What are the millstones? What have we learnt? What have we applied?"Looking Forward: Visioning and Building: "What do we aspire to? What are the roadblocks? What is the way forward?"
A video of a presentation by Dr Duncan Webb, Partner at Lane Neave, during the third plenary of the 2016 People in Disasters Conference. The presentation is titled, "Loss of Trust and other Earthquake Damage".The abstract for this presentation reads as follows: It was predictable that the earthquakes which hit the Canterbury region in 2010 and 2011 caused trauma. However, it was assumed that recovery would be significantly assisted by governmental agencies and private insurers. The expectation was that these organisations would relieve the financial pressures and associated anxiety caused by damage to property. Some initiatives did exactly that. However, there are many instances where difficulties with insurance and related issues have exacerbated the adverse effects of the earthquakes on people's wellness. In some cases, stresses around property issues have become and independent source of extreme anxiety and have had significant impacts on the quality of people's lives. Underlying this problem is a breakdown in trust between citizen and state, and insurer and insured. This has led to a pervading concern that entitlements are being denied. While such concerns are sometimes well founded, an approach which is premised on mistrust is frequently highly conflicted, costly, and often leads to worse outcomes. Professor Webb will discuss the nature and causes of these difficulties including: the complexity of insurance and repair issues, the organisational ethos of the relevant agencies, the hopes of homeowners and the practical gap which commonly arises between homeowner expectation and agency response. Observations will be offered on how the adverse effects of these issues can be overcome in dealing with claimants, and how such matters can be managed in a way which promotes the wellness of individuals.
A video of a presentation by Hugh Cowan, General Manager of Reinsurance, Research and Education at EQC, at the 2016 Seismics in the City Conference. The presentation is titled, "Working Together Strengthens Understanding".The abstract for the presentation reads, "Hear how EQC led a collaborative research project in Canterbury that involved diverse stakeholders from government, council officials and insurers to homeowners, and why collaboration means that Canterbury's geotechnical data is now helping to inform research locally, nationally and around the world."
A video of André Lovatt, Chair of Regenerate Christchurch, Hugh Cowan, General Manager of Reinsurance, Research and Education at EQC, and developer Antony Gough responding to questions from the floor during a panel at the 2016 Seismics in the City Conference. The panel has three themes:A City on the Move: Collaboration and Regeneration: "'Christchurch is now moving rapidly from the recovery phase into a regeneration stage with Central and Local Government working with the wider community, including the business community to ensure we get optimal outcomes for greater Christchurch' (CECC)."Looking Back: Remembering and Learning: "What are the milestones? What are the millstones? What have we learnt? What have we applied?"Looking Forward: Visioning and Building: "What do we aspire to? What are the roadblocks? What is the way forward?"
In September 2010 and February 2011 the Canterbury region of New Zealand was struck by two powerful earthquakes, registering magnitude 7.1 and 6.3 respectively on the Richter scale. The second earthquake was centred 10 kilometres south-east of the centre of Christchurch (the region’s capital and New Zealand’s third most populous urban area, with approximately 360,000 residents) at a depth of five kilometres. 185 people were killed, making it the second deadliest natural disaster in New Zealand’s history. (66 people were killed in the collapse of one building alone, the six-storey Canterbury Television building.) The earthquake occurred during the lunch hour, increasing the number of people killed on footpaths and in buses and cars by falling debris. In addition to the loss of life, the earthquake caused catastrophic damage to both land and buildings in Christchurch, particularly in the central business district. Many commercial and residential buildings collapsed in the tremors; others were damaged through soil liquefaction and surface flooding. Over 1,000 buildings in the central business district were eventually demolished because of safety concerns, and an estimated 70,000 people had to leave the city after the earthquakes because their homes were uninhabitable. The New Zealand Government declared a state of national emergency, which stayed in force for ten weeks. In 2014 the Government estimated that the rebuild process would cost NZ$40 billion (approximately US$27.3 billion, a cost equivalent to 17% of New Zealand’s annual GDP). Economists now estimate it could take the New Zealand economy between 50 and 100 years to recover. The earthquakes generated tens of thousands of insurance claims, both against private home insurance companies and against the New Zealand Earthquake Commission, a government-owned statutory body which provides primary natural disaster insurance to residential property owners in New Zealand. These ranged from claims for hundreds of millions of dollars concerning the local port and university to much smaller claims in respect of the thousands of residential homes damaged. Many of these insurance claims resulted in civil proceedings, caused by disputes about policy cover, the extent of the damage and the cost and/or methodology of repairs, as well as failures in communication and delays caused by the overwhelming number of claims. Disputes were complicated by the fact that the Earthquake Commission provides primary insurance cover up to a monetary cap, with any additional costs to be met by the property owner’s private insurer. Litigation funders and non-lawyer claims advocates who took a percentage of any insurance proceeds also soon became involved. These two factors increased the number of parties involved in any given claim and introduced further obstacles to resolution. Resolving these disputes both efficiently and fairly was (and remains) central to the rebuild process. This created an unprecedented challenge for the justice system in Christchurch (and New Zealand), exacerbated by the fact that the Christchurch High Court building was itself damaged in the earthquakes, with the Court having to relocate to temporary premises. (The High Court hears civil claims exceeding NZ$200,000 in value (approximately US$140,000) or those involving particularly complex issues. Most of the claims fell into this category.) This paper will examine the response of the Christchurch High Court to this extraordinary situation as a case study in innovative judging practices and from a jurisprudential perspective. In 2011, following the earthquakes, the High Court made a commitment that earthquake-related civil claims would be dealt with as swiftly as the Court's resources permitted. In May 2012, it commenced a special “Earthquake List” to manage these cases. The list (which is ongoing) seeks to streamline the trial process, resolve quickly claims with precedent value or involving acute personal hardship or large numbers of people, facilitate settlement and generally work proactively and innovatively with local lawyers, technical experts and other stakeholders. For example, the Court maintains a public list (in spreadsheet format, available online) with details of all active cases before the Court, listing the parties and their lawyers, summarising the facts and identifying the legal issues raised. It identifies cases in which issues of general importance have been or will be decided, with the expressed purpose being to assist earthquake litigants and those contemplating litigation and to facilitate communication among parties and lawyers. This paper will posit the Earthquake List as an attempt to implement innovative judging techniques to provide efficient yet just legal processes, and which can be examined from a variety of jurisprudential perspectives. One of these is as a case study in the well-established debate about the dialogic relationship between public decisions and private settlement in the rule of law. Drawing on the work of scholars such as Hazel Genn, Owen Fiss, David Luban, Carrie Menkel-Meadow and Judith Resnik, it will explore the tension between the need to develop the law through the doctrine of precedent and the need to resolve civil disputes fairly, affordably and expeditiously. It will also be informed by the presenter’s personal experience of the interplay between reported decisions and private settlement in post-earthquake Christchurch through her work mediating insurance disputes. From a methodological perspective, this research project itself gives rise to issues suitable for discussion at the Law and Society Annual Meeting. These include the challenges in empirical study of judges, working with data collected by the courts and statistical analysis of the legal process in reference to settlement. September 2015 marked the five-year anniversary of the first Christchurch earthquake. There remains widespread dissatisfaction amongst Christchurch residents with the ongoing delays in resolving claims, particularly insurers, and the rebuild process. There will continue to be challenges in Christchurch for years to come, both from as-yet unresolved claims but also because of the possibility of a new wave of claims arising from poor quality repairs. Thus, a final purpose of presenting this paper at the 2016 Meeting is to gain the benefit of other scholarly perspectives and experiences of innovative judging best practice, with a view to strengthening and improving the judicial processes in Christchurch. This Annual Meeting of the Law and Society Association in New Orleans is a particularly appropriate forum for this paper, given the recent ten year anniversary of Hurricane Katrina and the plenary session theme of “Natural and Unnatural Disasters – human crises and law’s response.” The presenter has a personal connection with this theme, as she was a Fulbright scholar from New Zealand at New York University in 2005/2006 and participated in the student volunteer cleanup effort in New Orleans following Katrina. http://www.lawandsociety.org/NewOrleans2016/docs/2016_Program.pdf
A review of the week's news including... A tsunami warning after a severe 7.1 earthquake north of East Cape, Havelock North's residents finally get the chance to grill their local leaders, the Environment Minister says people who insist that every lake and river should be safe to swim in are being unrealistic, Kim Dotcom wins his bid to live stream his High Court appeal against his extradition, New Zealanders who've been living in Australia for up to ten years say they're reaching breaking point, legal action over faulty steel mesh triggers doubts about some house insurance, a prominent Maori leader is found guilty of defrauding his fellow trustees in the Wellington Tenths Trust, a South Canterbury farming official says stealing 500 cows is like stealing the Crown jewels - complicated but not impossible, Auckland mayoral candidate Vic Crone pledges to bring forward the cross-harbour tunnel project by a decade or more after saying she'd make no commitments on it, while another candidate, Phil Goff wants to introduce a living wage for all council staff, the transgender community wants the waiting times for sex change operations cut, a sit down chat with Olympic pole vaulting bronze medalist Eliza McCartney and the real story behind the 2nd Bledisloe Cup test in Wellington from a former Wallaby.
There has not been substantial research conducted in the area of fraud and natural disasters. Therefore, this study sought to examine the perceptions of Canterbury residents toward the recovery process following the September 2010 and February 2011 earthquakes and whether residents felt as though contractor fraud occurs in Canterbury. A questionnaire was developed to gauge information about Canterbury residents’ self-reports involving the earthquakes, specific contractors involved, parties involved with the recovery process in general, and demographic information. Participants included a total of 213 residents from the Canterbury region who had been involved with contractors and/or insurance companies due to the recovery process. Results indicated that a high percentage of the participants were not satisfied with the recovery process and that almost half of the participants reported feeling scammed by contractors in Canterbury after the 2010 and 2011 earthquakes. Moreover, the results indicate that participants neither agreed with the assessments made about their property losses nor the plans made to recover their properties. In many cases, participants felt pressured and even reluctant to accept these assessments and/or plans. The present study does not seek to explain why contractor fraud exists or what motivates scammers. Conversely, it attempts to demonstrate the perceptions of contractor fraud and satisfaction that have taken place in the aftermath of the Canterbury earthquakes.
