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Canterbury earthquake

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Chief Executive's report

The Insurance Council has been extensively involved in the ongoing changes to our industry during 2009/2010. The changes are almost unprecedented in that they include, within the Review of Financial Products and Providers, a wide range of legislation and regulations that will change the face of our industry.

The submissions the Council has made have ranged from the Insurance (Prudential Supervision) Bill through to the Financial Providers (Disputes Resolution) Bill, which will see a revamp of our Insurance & Savings Ombudsman scheme, among other things.

The year has been a tremendously active and stimulating one for the Insurance Council, and could not have been completed in such a satisfactory way without the huge contribution made by our industry colleagues at Board, Committee and Working Group level.

While the Insurance Council remained focussed on our three core functions of Regulation, Representation and Knowledge Management, there is little doubt that Regulation was uppermost in all our minds. The Activities Record for the Insurance Council outlines in detail the list of submissions made, and within many of these submissions extensive work and consultation within the industry was achieved.

The challenge always for the Insurance Council is to be able to establish a definitive position on behalf of the industry without misrepresenting or failing to recognise the opinions of all members. It is rare that a submission is able to gain unanimity within the industry, and again I thank the members for their understanding of the difficulties of creating extensive regulatory submissions on behalf of the industry through a process of consultation.

While regulation held prominence, we also engaged in the area of representation on behalf of the industry. In particular we continued our very strong and positive relationship with the current government, engaging with them on a very wide range of issues going beyond the Review of Financial Products and Providers, and into specifically insurance-orientated areas.

Our relationship with the media continued to be constructive and we provided a wide range of opinions throughout the year on issues relating to insurance and the New Zealand economy and community. In addition our links with local government, and particularly the broker industry, have remained strong and continue to grow.

In the area of Knowledge Management we broadened the amount of statistics collected by the Insurance Council on behalf of the industry, to include Travel and Liability products. In addition to those increased statistics, we created an entirely new members' site on the Internet which contains the technical documents that many of our frontline underwriters, claims and customer service people require on a daily basis. This is now accessible through a password for our frontline staff to assist our customers.

The two new committees created during 2008 continue to develop their thoughts on areas of Accident Insurance and Regulation. The creation of a Travel Insurance Working Group established another area of discussion within the industry that was previously not specifically targeted.

While this has seen another increase in the number of committees, members of the Insurance Council and the committee members themselves remain committed to the specific Business Plans created at the start of the year, and have created a significant range of achievements during the past twelve months.

In the area of disaster response, 2009 saw a relatively benign year for claims as a result of fewer weather-related events. We are all acutely aware that this can change at any time, and also the increasing incidents of earthquakes kept the industry on their toes, and continually aware of the risks that climate and seismic events can create both for our customers and our reputation.

The recessionary effects of the global financial crisis saw an increase in fraud throughout the industry, and the Insurance Council's Fraud working group was actively engaged in addressing this issue.

In addition we saw an increase in fires around both domestic and commercial dwellings which had a huge cost for the industry, and committee members were also engaged on this matter.

A wide range of media outlets are now including insurance as part of their services and regular commentary. The Insurance Council worked with a number of websites and other media that have broadened their business coverage into specifically addressing the issues of insurance, rather than including insurance under the financial banner. This has been both a help to the industry and a challenge to us in the Council assisting with a greater understanding of insurance within the media. We have worked very closely with other industry associations on both this matter and also on the areas of regulation.

In one or two areas we have submitted joint submissions, with the approval of the membership, to strengthen the industry's position, and this is an area where in the future we will look to, where possible, increase this co-operation between the industry associations.

I would like to thank the President and Board for their enormous input to the work of the Council during 2009. I would also like to specifically, and very sincerely, than the enormous effort put in by staff of the Insurance Council, Members, and some of our colleagues in the wider industry, in contributing to the work of the committees, working groups, regulatory input and other activities of the Council.

2010 and 2011 will see a continuation of the delivery of the new regulatory environment for the insurance industry, and no doubt will bring with it continuing challenges to our work in the Council. We are very proud to represent the New Zealand insurance industry and will continue to provide a better understanding of the benefits of a sustainable and successful insurance industry to a wide range of customers, community and New Zealand economy.

Christopher Ryan
Chief Executive

Insurance Council of New Zealand

 

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