This year’s weather events in New Zealand have meant “challenges for everyone,” according to Tower Limited, which has had to implement changes in response to customer concerns.
The Kiwi insurer recently made headlines following complaints from policyholders who reportedly didn’t hear from Tower for months about their claim. Communication with the company supposedly became difficult after the claims were passed on to a third-party contractor.
It was noted that Tower had since altered its approach.
Shedding light on the complaints, Tower chief claims officer Steve Wilson (pictured) told Insurance Business: “The sheer volume of claims and the range of external parties required to work through claims related to the Auckland Anniversary floods and Cyclone Gabrielle have presented challenges for everyone.
“Like with any event, we are continuously learning and improving our processes, with the aim of settling claims as quickly and efficiently as possible. As part of this, we’ve been transitioning back to our usual practices outside of these two catastrophe events, with all remaining event claims now allocated to our in-house claims managers.
“This means that when customers talk to us from now on, they will be able to speak to their own dedicated Tower claims manager. This change has contributed to the settlement of more than 1,000 event claims since July.”
According to Tower, it received 5,550 claims from the Auckland Anniversary floods and 3,350 from Cyclone Gabrielle. Of these, 60% and 55%, respectively, are now settled, Wilson said.
To illustrate the massive scale of the two events and their corresponding claims, the Tower leader told Insurance Business: “Based on the last decade of data we have, from these two events we received five years’ worth of large loss claims. That’s five years’ worth of large loss claims in just over a fortnight.
“When it comes solely to weather-related claims, Tower saw a 370% increase in weather-related insurance claims from October 2022 to March 31, 2023, compared to the same period the year prior.”
For Cyclone Gabrielle alone, natural catastrophe exposure and event loss data provider PERILS is estimating a total industry loss of $2.02 billion.
As for the important task of processing claims, compounding the issue is their complexity. As Wilson indicated, not only is there a huge amount of claims to process, but there are also several parties involved before a claim is resolved.
Toka Tū Ake EQC claims head Bernadette McDougall previously explained: “It is important to note that claims for damage to residential land often take longer to settle than building claims, as the damage cannot be assessed until the land has settled and stopped moving.
“Properties can also have the additional complexity of a red or yellow placard applied during a risk assessment by the council. This action is independent of insurance and can delay assessment due to health and safety concerns.”
Insurance Brokers Association of New Zealand chief executive Melanie Gorham recently pointed to this aspect of the delays as well, telling Insurance Business that it’s taking a while for property risk categories to be confirmed.
Wilson, meanwhile, went on to state: “Experiencing damage from a natural disaster is stressful, and we want to reassure customers that our teams remain focussed on helping our communities get back to normal life as soon as possible.
“Since events began, we’ve set up a dedicated events team and have people in Rotorua, Auckland, and our Suva operations hub working on processing claims. Tower has also been actively working with Government’s Cyclone Recovery Taskforce, and we made sure our people were on the ground to support our customers at community hubs in Auckland and Hawke’s Bay shortly after the events took place.
“Tower is committed to doing everything we can to support our customers and communities to recover, and we’re pleased to share that these actions have contributed to good progress in settling claims, with 60% of claims now settled for the Auckland Anniversary weekend floods and 55% of claims settled for Cyclone Gabrielle.”
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