Christchurch Earthquake: 84 Life Insurance Claims Paid

Monday 22 Aug 11 1:43pm
Latest statistics show the life insurance industry has now paid out on 84 death claims from the Christchurch earthquake.
As at 30 June 2011, ISI members had received and paid out on 84 life insurance claims as a result of the 22 February earthquake, worth a combined $16.5m and representing an average payment of $196,429 per claim.

As well as death claims, in the period to 30 June 2011 the industry also paid $395,000 in redundancy claims and $104,000 in income protection claims as a direct result of the Christchurch earthquake.

In comparison to the industry, data obtained from ACC confirmed that the Agency had, as at 28 May 2011, paid around $1.1m in death claims, with $609,000 in funeral grants (129 claims at $4,700 each) and $509,000 in survivor grants (70 claims at $7,300 each).
ACC had also processed 296 accidental injury claims that resulted in lost income, worth a total of $1.05m at an average of $3,547 per claim.
ISI CEO, Peter Neilson says ACC has a much higher level of income protection claims (than the industry) due to the fact that ACC provides universal coverage which meant they provided financial assistance to a larger number of victims’ families, albeit at lower benefit levels.
Mr Neilson says that while the industry is pleased to have helped the families of the victims who had life insurance, it is sobering to think that almost half of the 181 people who lost their lives may have had no life insurance.
“While there were victims who were either too old or too young to need cover, and a number of foreign nationals who may have had cover outside New Zealand, the simple fact is there were a large number of people whose families would have benefited from having cover but didn’t,” he says.
In addition, Mr Neilson believes that many of those who did have cover may have been under-insured.  “The average life insurance claim paid ($196,429) was about four times the average annual income, and may not have even covered the outstanding mortgage in many instances,” said Mr Neilson.  “Many life insurance policies are taken out to ensure an outstanding mortgage balance can be paid off but this does not provide cover for any loss of income from the deceased.”
“Clearly there is still much to do to ensure more Kiwis are adequately protected.  There are indications from the industry that the Christchurch tragedy has increased public awareness of the need for life insurance and how it is able to provide financial support for those left behind.”
Mr Neilson says the ISI is currently in the middle of a study into the level of under-insurance in New Zealand and the reasons for this.
“We already suspected, and the Christchurch situation has confirmed it, that too many New Zealanders have either none, or too little cover,” he explains.  “The study that we have commissioned aims to identify just how big the problem is, and what can be done to bridge this insurance gap.  We expect to be in a position to provide the industry and the Government with both the evidence and some advice by the end of the year.”

facebook tag

About us

The Financial Services Council (FSC) represents investment and life insurance companies in New Zealand.

Read more >


Contact us

Ph: +64 09 985 5762

Email: fsc@fsc.org.nz

Level 33, ANZ Centre,
23-29 Albert Street, Auckland 1010