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Mayor wants forum to discuss Wellington’s rising insurance premiums

News from WCC
Wellington Mayor Justin Lester is calling for a forum with the Government’s Earthquake Commission Minister, insurance companies, and affected stakeholders to discuss rising insurance premiums.

The Mayor was responding to an announcement by Insurance Australia Group (IAG) – New Zealand’s largest general insurer – that it will start to charge higher home and contents premiums for customers who live in areas prone to natural disasters and severe weather.

“IAG has between 40 and 50 percent of the Wellington market, so this could potentially affect a lot of our residents,” he says. “This will be a daunting prospect for those facing increasing premiums on the homes they already own, and also make it even more difficult for first home buyers.”

The Mayor says he had raised the issue with Megan Woods, the Minister Responsible for the Earthquake Commission, and he will be convening an insurance forum and inviting the Insurance Council, IAG, body corporate and home owner representatives who are significantly affected by premium increases.

“I want to canvas issues in the Wellington market and look at the immediate and long-term future for people needing insurance. It may be that the Government needs to consider what insurance companies are required to offer in a market, and they may have to offer an affordable option where they operate.

“Residents, businesses and property owners are now facing the prospect of higher premiums. Some may not be able to afford it. Insurance is crucial for a city. It has to be available and affordable for banks to lend, for businesses to operate efficiently, and for people to have peace of mind.”

Press Release – Business Central – Wellington
Business needs to be at the table for the Mayor’s proposed forum to discuss rising insurance premiums, says the Wellington Chamber of Commerce.

“The Chamber welcomes the news that the Mayor is convening a forum, given the significant insurance costs businesses are facing. Businesses are affected by rising premiums just as much as homeowners are, if not more, so we need to be a big part of this,” says Chief Executive John Milford. “Business pays 44% of the city’s total rates and are crucial to the local economy. Significantly increasing business premiums would affect the economy by adding to the cost of doing business and so pushing up the price of goods and services paid by everyone.

“Add these premiums increases to the Mayor’s proposed business rates hike, proposed changes to the business rating multiplier, and the recent increase in Fire Service levies, and in a short space of time we’re talking about significant cost increases – not to mention all the other recent regulatory and compliance cost increases.

“We understand that insurance companies have to remain viable and allow for risk, but they must be mindful of the effect that big rises could have and look at ways of softening the blow while offering the cover businesses need.

“We are pleased the Mayor is increasingly cognisant of the cost realities facing business, and hope he will recognise this when it comes to his own business rates hike proposal. Council will deliberate on this significant change in the annual plan later this month.”

5 comments:

  1. Keith Flinders, 30. April 2019, 10:54

    Does Mayor Lester not see the irony of his statement re increases in insurance costs ?

    Since 2012, WCC/GWRC combined rates have risen 50% greater than the average income has. The projected rates rise 2019/20 will be about three times greater, in percentage terms, than the recent rise in General Retirement Income payments.

    That aside how interesting it is that Auckland which sits on several dormant, but not extinct, volcanoes, is seen as less of a risk to insurance companies.

     
  2. Rondell, 30. April 2019, 22:36

    Areas prone to natural disasters and severe weather…. Shelly Bay?

     
  3. Rowan Greig, 1. May 2019, 8:06

    It’s a pity that there has been little discussion over the time it took Governments and Councils to upgrade the building code to account for the potential damage from earthquakes. It’s not as if they didn’t know about it.

     
  4. Keith Flinders, 1. May 2019, 9:44

    Statistics House and Defence House were both built to the then upgraded building codes of early this century, both are now piles of rubble after being occupied for about 10 years. Millions of dollars worth of taxpayer owned assets inside these buildings were destroyed during demolition works, but thankfully no deaths or injuries were sustained. Had the 2016 earthquake happened 12 hours later it would have been a different story.

    Where are “we” at now with revising the codes using those two buildings as examples of not what to do, does anyone know?

     
  5. Heidi P, 4. May 2019, 7:01

    I don’t think the Mayor gets the irony at all Keith, he should be having a forum to discuss the rising rates.