Earthquake damage in central Christchurch. Photo / Sarah Ivey
The head of AMI Insurance, the largest New Zealand-owned insurer operating here, says the firm is on sound footing, three months after the Canterbury earthquake.
John Balmforth, AMI's chief executive, strongly denied speculation of any problems at the Christchurch-headquartered business but said conjecture about this had certainly made its way
to him.
"It's business as usual. I'm conscious of the fact that there are suggestions that we might be short of capital. In fact, we have $356 million capital and a reinsurance programme in excess of $500 million which is supported by A-rated reinsurers," he said.
The business was backed by some of the largest international reinsurers based in Bermuda and other parts of the world, he said.
"We have 73 branches and are the best performer in New Zealand. The cost of the earthquake to AMI is $5 million and international reinsurers pay the rest. That $5 million is the same as the excess on your car insurance policy."
AMI had received about 12,000 claims after the earthquake, he said.
"This is for home, contents, temporary accommodation, loss of rent, motor vehicle, boats, farms - it's not really high. Because we started here we have a big market share here, we don't regard that as high," he said of the Canterbury claims.
AMI's business was not severely damaged by the quake and could withstand disasters of a similar scale, he said. The business was founded in Christchurch in 1926.
"Our solvency as at June 30 this year was 110 per cent compared to an industry average around 50 per cent. Our reinsurers are being exceedingly supportive and our reinsurance programme would enable us to handle three events of the size of the earthquake."
Speculation surrounding AMI's ability to handle the earthquake was not based on facts, he said.
It was untrue that AMI had a large number of poorer clients.
"In fact, our market penetration is into New Zealand's middle market."
AMI had 450,000 customers evenly divided between the North Island and South Island, he said.
Only one office was forced to close after the earthquake and that was AMI's mid-city branch at 672 Colombo St. But Balmforth said the insurer did not own this building but was a tenant.
