Brokers take on key support role in cyclone's wake

Brokers are working flat out to contact clients following the devastating impact of Cyclone Gabrielle, the Insurance Brokers Association of New Zealand (IBANZ) says.

“Some brokers in the affected regions have their own problems to deal with but they are elevating the clients’ needs,” IBANZ CEO Mel Gorham told insuranceNEWS.com.au.

“There are some still out of contact and brokers are using whatever means at their disposal to get in touch.”

She says many people are not yet able to focus on putting in an insurance claim but brokers can still offer valuable support, including lodging a claim on behalf of their clients.

“Some clients are dealing with other things before insurance. They are just focused on what is in front of them and getting through the day.

“But brokers are contacting them to ask if they’re ok. When they are ready to get the claim in, that starts the process of returning to normality. Brokers are as busy as insurers and their teams.”

Ms Gorham says the impact of the cyclone, which followed record-breaking floods in Auckland last month, will be significant.

She says some communities escaped relatively unscathed but there are others nearby “where there is nothing representing normal life”.

“At this stage it’s quite hard to get a handle on it but the number of claims will be very high,” she said.

She expects the volume of claims to lead to delays similar to those experienced in Australia last year, as New Zealand struggles to find enough workers in key industries.

“Nobody is geared up for events of this size,” she said. “There is an incredibly tight labour market and there will be some issues.”

Ms Gorham says about 25% of home and contents customers in the country use a broker, who is independent of the insurer, and the figure is significantly higher for businesses.

She says those people will benefit from having an advocate working on their behalf to progress their claim, advise them about the process involved and help them receive their full entitlement.

Ms Gorham also believes the two catastrophe events this year could affect the way insurers consider flood risk in future.

“It would be remiss to think that there will not be some sort of impact.

“Insurers were already looking at how they assess flood in this country, and they’ve been talking about risk-based pricing in this area for some time.”

Asked about the possibility of a flood reinsurance pool, which was raised during government consultation on the National Adaptation Plan, Ms Gorham says it “can’t be discounted”.

But she believes there is only a short window of opportunity to introduce such a scheme and that there is “more than one solution”.

Building resilience and better land-use planning are also key, she says.

“Governments and councils need to take a hard look at what they allow to be built where. We need to make the future much more sustainable.”