We examine the role of business interruption (BI) insurance in business recovery following the Christchurch earthquake in 2011. First, we ask whether BI insurance increases the likelihood of business survival in the immediate (3-6 months) aftermath of a disaster. We find positive but statistically insignificant evidence that those firms that had incurred damage, but were covered by BI insurance, had higher likelihood of survival post-quake compared with those firms that did not have any insurance. For the medium-term (2-3 years) survival of firms, our results show a more explicit role for insurance. Firms with BI insurance experience increased productivity and improved performance following a catastrophe. Furthermore, we find that those organisations that receive prompt and full payments of their claims have a better recovery than those that had protracted or inadequate claims payments, but this difference between the two groups is not statistically significant. We find no statistically significant evidence that the latter group (inadequate payment) did any better than those organisations that had damage but no insurance coverage. In general, our analysis indicates the importance not only of adequate insurance coverage, but also of an insurance system that delivers prompt claim payments. This is a post-peer-review, pre-copyedit version of an article published in 'The Geneva Papers on Risk and Insurance - Issues and Practice'. The final authenticated version is available online at: https://doi.org/10.1057/s41288-017-0067-y. The following terms of use apply: https://www.springer.com/gp/open-access/publication-policies/aam-terms-of-use.
Principal contractors can achieve better financial performance in civil construction projects by increasing the proportion of works delivered by subcontractors. However, anecdotally the use of subcontractors is thought to be make principal contractors less competitive due to compounding profit margins. This study found that projects with a higher proportion of subcontracted work exhibit better financial results than projects with less work delivered by subcontractors. This study uses the Christchurch Infrastructure Alliance (known as the Stronger Christchurch Infrastructure Rebuild Team, SCIRT) as a case study to observe why principal contracting firms engage subcontractors and the effect subcontracting has on the overall performance of a construction project. Five top tier civil contracting firms (known as ‘delivery teams’) participated in the alliance. Each team was responsible for the delivery of individual projects. A sample of 334 individual SCIRT projects were analysed, and key delivery team staff were surveyed, to investigate the effect subcontractor engagement has on performance. Between the five delivery teams there were clear differences in how much work was delivered via subcontracts. The extent of this subcontractor engagement had a significant effect on the relative performance of the principal contractor. A positive correlation between subcontractor engagement and overall financial performance is observed, and a negative correlation is observed between subcontractor engagement and non-financial performance. Although the causes of these relationships appear complex, the primary reason appears to be that subcontracting fosters increased productivity by cascading financial performance incentives closer to the physical construction task. To maximise competitiveness and financial performance, principal contractors must embrace the use of subcontractors and develop efficient systems of managing subcontracted work.
ANDREW LITTLE to the Prime Minister: Does he stand by his statement that “Nick Smith has dealt with some of the most complex problems of resource law and housing more successfully than any other politician here could have”; if so, in what ways, if any, does he think the housing situation for New Zealanders has improved under Hon Nick Smith?
BRETT HUDSON to the Minister of Finance: What steps is the Government taking to improve productivity in the public service?
MARAMA FOX to the Minister of Health: Does he agree with counsellor Andrew Hopgood, regarding P addicts, that “… a lack of detox and live-in rehabilitation centres limits options for addicts seeking help”; if so, what is he doing to address this shortage?
JONATHAN YOUNG to the Minister for Economic Development: What update can he give on ways the Government is supporting economic development in the Gisborne region?
CHRIS HIPKINS to the Associate Minister of Education: How many schools across the country are currently using libraries, halls, and other areas not intended for regular teaching as temporary classrooms?
ANDREW BAYLY to the Minister of Justice: What recent announcements has she made regarding phase two of the anti-money laundering and counter-financing of terrorism regime?
CATHERINE DELAHUNTY to the Minister for the Environment: Will he put a moratorium on bottled water exports, in response to a 15,000 strong petition and nationwide rallies on water issues taking place today?
KELVIN DAVIS to the Minister for Māori Development: Does he have confidence that his leadership of Te Puni Kōkiri and its programmes are resulting in the best outcomes for Māori?
MAUREEN PUGH to the Minister of Education: What announcements has she made about the Government’s education-related Better Public Services targets?
Dr DAVID CLARK to the Minister of Health: How much did the Canterbury District Health Board receive from the Government for mental health and addiction services support in response to the Kaikōura earthquake, after paying off the debt of Kaikōura’s health centre?
Rt Hon WINSTON PETERS to the Minister of Foreign Affairs: Does he stand by all his statements; if so, why?
Dr PARMJEET PARMAR to the Minister for Disability Issues: What recent announcements has she made regarding a nationwide transformation of the disability support system?
