AMI Insurance

AMI Insurance
HeadquartersChristchurch, New Zealand
Parent organization
IAG New Zealand
Websitewww.ami.co.nz
Formerly called
Allied Mutual Insurance
AMI Insurance building in Manukau

AMI Insurance began in Christchurch, New Zealand, in 1926 as the South Island Motor Union (SIMU), and grew to be the second biggest residential insurer in New Zealand.[1] It was a mutual insurance company, meaning it was owned by its policy holders, until it was bought out by IAG New Zealand in 2011, following the 2011 Christchurch earthquake.

History

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Effect of Canterbury earthquakes

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After the Christchurch earthquakes of 2010 and 2011, there was uncertainty about AMI's financial state, due to doubt over obtaining sufficient reinsurance cover for further earthquakes, plus lack of exact figures from the government's EQC to indicate how much of the earthquakes' insurance costs would have to come from Allied Mutual Insurance (AMI). The New Zealand government talked of bailing out the company up to $1,000 million[2] because of the chaos that would ensue if it collapsed. The government eventually agreed to a NZ$500 million support deed. However, large losses led to a $76 million shortfall of its $198.6 million regulatory capital requirement and so forced the controversial[3][4] sale of AMI to IAG New Zealand, the local arm of Australia and New Zealand's largest insurance company, Insurance Australia Group. IAG NZ had already acquired major insurance names in New Zealand, such as NZI (formerly New Zealand Insurance) and State Insurance, and with acquiring AMI's business (other than Christchurch earthquake-related work) IAG covered 60% of the domestic insurance market.

Southern Response

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The government created a government-owned company, Southern Response Earthquake Services, to take over the part of AMI's work that related to the Christchurch earthquake repairs. It was responsible for settling claims by AMI policyholders for Canterbury earthquake damage that occurred before 5 April 2012.[5] Perceived poor performance of that organisation led to some protests[6][7] and a lawsuit,[8] but a large percentage of the easier repairs were actioned despite a period of work outstripping resources in post-quake Canterbury.

In 2018 it was revealed that four years earlier Southern Response had employed private investigation company Thompson and Clarke to attend and record public meetings held by groups of AMI/Southern Response claimants. A report by the State Services Commission found that in doing so Southern Response had acted inconsistently with the State Services Code of conduct on a number of occasions in 2014–2016.[9]

2020 closure of branches

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On 23 July 2020, IAG announced that AMI would be closing all of its 53 branches and its remaining State office in New Zealand in phases. The Albany, Botany, Te Rapa, Mount Maunganui, Wellington, Hornby, and Dunedin offices would close in June 2021 while most remaining offices would close on 18 September. The Timaru branch would remain open until 27 November 2020. 65 branch manager jobs would be eliminated while 350 jobs would be transferred to customer service and other departments.[10]

References

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  1. ^ Miles, Sarah (January 23, 2013). "Understanding What Happened to AMI". The Christchurch Fiasco. Archived from the original on 4 April 2019. Retrieved 18 March 2014.
  2. ^ Steeman, Marta (7 April 2011). "Quake-hit AMI insurance bailout could cost $1 billion". Stuff. Archived from the original on 20 December 2018. Retrieved 18 March 2014.
  3. ^ Vaughan, Gareth (December 22, 2011). "IAG 'taking out mutual competitor' AMI would create 'near duopoly', Merrill Lynch analysts say, meaning Commerce Commission could block deal". Archived from the original on 5 April 2019. Retrieved 18 March 2014.
  4. ^ Steeman, Marta (20 December 2011). "AMI sale done without consulting members". The Press. Archived from the original on 5 April 2019. Retrieved 18 March 2014.
  5. ^ "About Us". Southern Response. Archived from the original on 7 January 2019. Retrieved 5 January 2019.
  6. ^ Satherley, Dan (2 Dec 2013). "Quake claimants protest outside Southern Response". Newshub. Archived from the original on 21 August 2016. Retrieved 18 March 2014.
  7. ^ Greenhill, Marc; Anderson, Charles (2013-12-16). "Protesters 'swamp' Southern Response". The Press. Archived from the original on 20 December 2018. Retrieved 18 March 2014.
  8. ^ O'Connor, Sarah-Jane (2014-03-07). "Class action against Southern Response". The Press. Archived from the original on 4 April 2019. Retrieved 18 March 2014.
  9. ^ "State Services Commission Inquiry Statement". Southern Response. 18 Dec 2018. Archived from the original on 17 January 2020. Retrieved 7 Jan 2019.
  10. ^ "IAG announces closure of 53 AMI stores". New Zealand Herald. 23 July 2020. Archived from the original on 23 July 2020. Retrieved 23 July 2020.
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