I guess we should have known that whatever your worst fears about the insurance industry are, in reality you just aren’t thinking imaginatively enough.
In an article in the Melbourne Age, Suncorp (one of Australia’s biggest insurers) chief executive Patrick Snowball yesterday acknowledged there was “some confusion” over the definition of the latest quake:
‘‘We don’t know whether this is a second event or continuation of the first,’’ Mr Snowball said. “What is in question now is was the epicentre of this earthquake actually in a different place and therefore was it another event.”
Why would an insurer care? Well, because they won’t have to cover an aftershock…it’s either out of time to make a claim on the original Sept 2010 quake or the re-insurance terms are only for “new” events. The Earthquake Commission (that means the long suffering kiwi taxpayer) will shoulder the lot, with the promise of new levies to come so that the EQC can start rebuilding its reserves.
To be fair to Suncorp, the article doesn’t say whether or not Suncorp is one of the EQC re-insurers. Perhaps they just happened to be the one rung up by a journalist to whom the idea had occured.
Nevertheless, wait for the undignified argument over whether the quake was “new” or an aftershock to escalate into the local newspapers as people still grieve and count the personal cost of Tuesday’s devastating tragedy. That will doubtless assist them to feel really good about life in general, and insurers in particular, just when they need it most.