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Massey University Earthquake Research Project

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Dr Michael Naylor's presentation from 12th May 2016 EQC Declaratory Settlement meeting. Massey Research into the Response of EQC & Insurers to Quake Claims

Exert: In my non-lawyer opinion the EQC- Action group agreement is unusual. Most legal agreements are limited to the group involved. The way the EQC announcement was phrased – ‘this is what we have always done’ – opens it to everyone to ensure that ‘as - when new’ was applied to their claim. This is every EQC repair/ rebuild/ cash claim

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Massey University Earthquake Research Project

  1. 1. School of Economics and Finance College of Business Introduction to Investments Massey Research into the Response of EQC & Insurers to Quake Claims Dr Michael Naylor Senior Lecturer in Finance & Insurance
  2. 2. Introduction to Investments School of Economics and Finance College of Business Disclaimer • I am not a lawyer or an engineer so I won’t answer any technical questions. • However I am one of the few experts with a legal right to say what I think. • I am NZ’s only insurance academic 2
  3. 3. Introduction to Investments School of Economics and Finance College of Business The EQC Agreement • In my non-lawyer opinion the EQC- Action group agreement is unusual. • Most legal agreements are limited to the group involved. • The way the EQC announcement was phrased – ‘this is what we have always done’ – opens it to everyone to ensure that ‘as - when new’ was applied to their claim. • This is every EQC repair/ rebuild/ cash claim 3
  4. 4. Introduction to Investments School of Economics and Finance College of Business EQC Agreement • The style of agreement works politically, as no-one has to accept they were wrong. • However it fails in implication terms. • This may be because EQC lawyers advised them that they would lose any further cases. • Every one needs to reassess their claim. • The obvious EQC response will be to delay and deny any review requests. • So don’t expect EQC to roll over. 4
  5. 5. Introduction to Investments School of Economics and Finance College of Business Note on Foundations • Its clear that the nature of some areas of land in Canterbury has changed. An example would be earth which is a mixture of stones and shingle. This could be old river beds. • This was perfectly OK to build on with a shallow ring foundation prior to the quake. • However the quakes have shaken that mixture up. It will take at least another 10 years for it to settle. 5
  6. 6. Introduction to Investments School of Economics and Finance College of Business Foundations • Thus a shallow ring foundation may no longer be OK, as further settling will cause the earth to sink in places, even on TC1 & 2. • Thus: does the building code and an 'when new' definition require a proper engineering assessment of any land issues and possibly an engineered foundation solution, even though this was not the case pre-quake? 6
  7. 7. Introduction to Investments School of Economics and Finance College of Business Foundations • Now I'm not a geotech engineer or a building code expert, so I won't presume an answer. • But it is an issue which has been ignored. • My guess would be – ‘of course all repairs/ rebuilds need a land /foundation assessment by a qualified person.’ • However my casual impression is that 90% of EQC repairs have not had any foundation assessment. They’ve not even had roof structure assessments. 7
  8. 8. Introduction to Investments School of Economics and Finance College of Business Foundations • They’ve not even had roof structure assessments. • Land assessments should be a bare minimum. • For a number of homes, like those in clay, there is no issue. • But how to tell unless assessed? Esp as old river beds maybe buried, and therefore not obvious on the surface. 8
  9. 9. Introduction to Investments School of Economics and Finance College of Business Massey Research • A team at Massey University is researching the responsiveness of the EQC and private insurers to quake claims. • This is very detailed and covers; – How the communication was handled – How the assessments were handled – How rebuilds were handled – How EQC/ insurers dealt with stressed/ traumatised clients – etc 9
  10. 10. Introduction to Investments School of Economics and Finance College of Business Massey Research • We are using multiple approaches: – A tick box survey – A detailed experiences questionnaire – Focus group talks – Interviews with industry/ experts – Video recordings of claimants talking about their insurance experiences • We want EVERY chch resident to respond and tell their story. 10
  11. 11. Introduction to Investments School of Economics and Finance College of Business Massey Research • We are all insurance experiences, whether good or bad. • We particularly want to know what insurers did well, so that we can recommend this. • We love to hear about your experiences. • Our report will be aimed at both the people of Christchurch and an international audience of insurers. 11
  12. 12. Introduction to Investments School of Economics and Finance College of Business Massey Research • What you can do: • Go to www.quakesurvey.co.nz • Fill out the tick-box survey • Fill out the experiences survey • We are back next weekend (19th-23rd) to video record peoples talking about their experiences for the National Archives. • This can be delay released until your claim is settled. 12
  13. 13. Introduction to Investments School of Economics and Finance College of Business Massey Research • What you can do you want future generations to know about Canterbury insurance quake claims? • Please take posters and flyers at the back and get cafes’, takeaways, sports clubs, etc to put them up. • Please pass the survey link onto via your mobile phones to everyone who know, including your work colleagues. 13
  14. 14. Introduction to Investments School of Economics and Finance College of Business Massey Research • Massey University regards recording and preserving the experiences of Canterbury claimants as a of national and international importance. • We are the only independent research report which will ever occur. We are skilled and passionate. This is your chance to have your say. • The survey will remain open indefinitely. 14
  15. 15. Introduction to Investments School of Economics and Finance College of Business Massey Research • I still have some time tomorrow afternoon to video record people’s experiences. • If you are interested please see me at the end. • We will open a dropbox to receive self- recorded videos. We will post instructions soon. • The Survey Prizes, 3x $200 Prezzie cards, will be awarded soon. Be in fast! 15

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