AMI Insurance

[cheshirecat]

Those with AMI and riding . . . .
Announcement at 10 from the Govement (behind the 8 ball yet again)

[Swoop]

Half a billion dollars "loaned".

[spookytooth]

With all the billions spent bailing out all these companys the gove could have paid off every one in NZ morages and bills by now

[Hiflyer]

You get what you pay for I guess.

Really cheap premiums = not enough money to pay out on claims, it seems.

I feel sorry for the people in CHCH that still haven't got any form of pay out from AMI

[NinjaNanna]

Seems like a sensible move by the government to me.

[Oscar]

With all the billions spent bailing out all these companys the gove could have paid off every one in NZ morages and bills by now

It's not a company in the usual sense.
It's a mutual insurer - owned by it's policyholders.

[The Baron]

I am just sick to death with bail outs.

[Oscar]

I am just sick to death with bail outs.

The alternative is worse.

[neels]

Guess that explains why the AMI assessors have been such tight bastards when assessing earthquake damaged houses.

[marie_speeds]

Surely only about 10% of policy holders would be making any sort of claim per year, so effectively they are squirrelling away lots of money each year from premiums. So when they do have to pay out as in the case of ChCh, one has to wonder what has happened to the kitty? I'm confused....

[ajturbo]

Surely only about 10% of policy holders would be making any sort of claim per year, so effectively they are squirrelling away lots of money each year from premiums. So when they do have to pay out as in the case of ChCh, one has to wonder what has happened to the kitty? I'm confused....


+1.............................

[imdying]

I'm confused....No, just not schooled in how insurance 'worked' (works hahaha). Oscar will be along soon enough.

[mashman]

fuckin trific... ha ha haaaaaaaaaaaaa (http://nz.news.yahoo.com/a/-/top-stories/9151551/ami-bailout-could-cost-1b/) who owns AMI? and how much are they supposed to have in reserve to be able to cover the potential debt they have?

bah bah black sheep :innocent:

[Hiflyer]

They own 225,000 domestic policies in chch itself, 10% of that is 22,500, so if they've used two lots of $600m re insurance, thats's an average of ~$53,000 per claim. Not unrealistic considering the damage.

Plus they insure some commercial stuff too.. i'd say the Govt did a very nice thing, but AMI shouln't have been charging ridiculously low premiums IMHO cos then they wouldn't be stuck like this.

I guess it's unfortunate that ithad to hit where they have the biggest market share

EDIT: Shit forgot about EQC contribution. Yea actually where the hell did their money go! The Govt chucks in the first $100,000 of house claims, then AMI can't pick up the rest so the govt steps in like a rich kids dad when the kids can't control their spending!

[Oscar]

Surely only about 10% of policy holders would be making any sort of claim per year, so effectively they are squirrelling away lots of money each year from premiums. So when they do have to pay out as in the case of ChCh, one has to wonder what has happened to the kitty? I'm confused....

Insurers base their premiums on average everyday claims with a margin for ‎catastrophic events such as large earthquakes. The margin goes to reinsurers - this is ‎effectively the insurer is insuring itself against multiple claims from a single event ‎exceeding a certain amount. In AMI’s case this was claims in excess of $5m any one ‎event up to a limit of $600m.‎

What was not allowed for was the possibility of multiple events. After the first event ‎an insurer would have been required to buy back its reinsurance cap (which would ‎have cost plenty), and the wisdom in the industry is that AMI was light on reinsurance ‎anyway (hindsight is a wonderful thing). ‎

So the bottom line is that they already have $450m of claims from Sept 4th and ‎aftershocks and are expecting the second event to exceed that. So they’re almost ‎certainly going to exceed the cap for the second quake and will have to start forking ‎out capital reserves ($350m). ‎

Add to this the fact that AMI have their Head Office in Christchurch (which means ‎their infrastructure is munted), and have up to one third of the domestic insurance in ‎Christchurch (another bad decision – to be over exposed to one area) and you can see ‎why they’re in trouble… ‎

[YellowDog]

I moved my car policy away from AMI as I found them (the operator) quite stupid whilst I was trying to get a motorcycle quote.

[Tunahunter]

Seems like a sensible move by the government to me.

I agree - with such a market dominance in one town, an big earthquake would test any company's cash position. I have found AMI to be a great company in my dealings with them around car insurance.

[marie_speeds]

I have read what Oscar wrote and tried to absorb... but am still confused????
Here's why....in the 5 years in the lead up to the Sept 2010 EQ say the company only had minor day to day claims surely they would've had a kitty. After Sept 2010 a whole heap of claims came in for damage, which the EQC would've paid out on first, and if damage was under $100k then theoretically insurance companies would've paid zilch in many cases. Many of the severely damaged properties were not actually addressed or in the process of being repaired by the insurance companies when the Feb EQ hit i.e at that point in time they still had not paid out anything for Sept. So I really don't understand why they are pleading poverty...

Must be me must be too tired to think this stuff through.....Roll on the weekend...

[avgas]

Insurers and Banks are guaranteed not to have money these days.
Its all virtual for them.

Pity for us that our payments are not.

[Bald Eagle]

I have read what Oscar wrote and tried to absorb... but am still confused????
Here's why....in the 5 years in the lead up to the Sept 2010 EQ say the company only had minor day to day claims surely they would've had a kitty. After Sept 2010 a whole heap of claims came in for damage, which the EQC would've paid out on first, and if damage was under $100k then theoretically insurance companies would've paid zilch in many cases. Many of the severely damaged properties were not actually addressed or in the process of being repaired by the insurance companies when the Feb EQ hit i.e at that point in time they still had not paid out anything for Sept. So I really don't understand why they are pleading poverty...

Must be me must be too tired to think this stuff through.....Roll on the weekend...

They are pleading poverty so they can make sure they pay as little as possible, it's the business way.

[Oscar]

They are pleading poverty so they can make sure they pay as little as possible, it's the business way.

Nothing of the sort.
It's a mutual company - it belongs to its policyholders.
Besides, the minute they draw on the Govt. facility, it becomes a state owned entity.

[avgas]

I have read what Oscar wrote and tried to absorb... but am still confused????
Here's why....in the 5 years in the lead up to the Sept 2010 EQ say the company only had minor day to day claims surely they would've had a kitty. After Sept 2010 a whole heap of claims came in for damage, which the EQC would've paid out on first, and if damage was under $100k then theoretically insurance companies would've paid zilch in many cases. Many of the severely damaged properties were not actually addressed or in the process of being repaired by the insurance companies when the Feb EQ hit i.e at that point in time they still had not paid out anything for Sept. So I really don't understand why they are pleading poverty...

Must be me must be too tired to think this stuff through.....Roll on the weekend...

Will break it down for you.
You say to insurer1:
"My house is worth 100K, I pay you 1K to insure it, so when it fail you pay 100K"
pay them 1K. Say they do this for 10 houses = 10K

insurer1 says to insurer2:
"These houses worth 1M, I pay you 9K to insure them, so when it fails you pay 1M"

Earthquake
insurer2 says "no money now come back later"
insurer1 says "all I can pay is 1K as that is all I have"
You lose. You invested in a joint idea. Half insurer1 half insurer2......

[avgas]

Nothing of the sort.
It's a mutual company - it belongs to its policyholders.
Besides, the minute they draw on the Govt. facility, it becomes a state owned entity.
We used to have one of those.... (http://www.state.co.nz/About-State/)

[Oscar]

I have read what Oscar wrote and tried to absorb... but am still confused????
Here's why....in the 5 years in the lead up to the Sept 2010 EQ say the company only had minor day to day claims surely they would've had a kitty. After Sept 2010 a whole heap of claims came in for damage, which the EQC would've paid out on first, and if damage was under $100k then theoretically insurance companies would've paid zilch in many cases. Many of the severely damaged properties were not actually addressed or in the process of being repaired by the insurance companies when the Feb EQ hit i.e at that point in time they still had not paid out anything for Sept. So I really don't understand why they are pleading poverty...

Must be me must be too tired to think this stuff through.....Roll on the weekend...

A mutual insurer like AMI is probably aiming to pay out about 70% of each years ‎premium in “ordinary” claims, has an expense ratio of about 20-25%, and profits of 5-‎‎10% (plus earning another 5% on premiums invested). ‎

One of the expense items would be reinsurance catastrophe cover, to pay for the ‎extra-ordinary claims (like earthquakes). In simple terms AMI did not buy enough ‎reinsurance. ‎

[marie_speeds]

Thanks oscar for clarifying. Now all i can say is the govt is bailing out a lemon with tax payer money. After today AMI will have no policy holders left as everyone in the rest of the country will jump from the sinking ship and find new insurers.

[Banditbandit]

:rofl: And who is it who believes that private enterprise can "do it better"?

Another case of "Yeah right" ..

[Oakie]

I've been with AMI forever and I'll stay with them. Been a great company to deal with all these years. I wish them a full recovery.

[Latte]

I've been with AMI forever and I'll stay with them. Been a great company to deal with all these years. I wish them a full recovery.

Yeah they've been pretty good to us, and rates are good (guess not for long). Although we'll stay with them even if it increases (within reason).

[Oakie]

who owns AMI? and how much are they supposed to have in reserve to be able to cover the potential debt they have?
:innocent:

We, the policy holders own it as it is a mutual organisation. No shareholders.

As for reserves, God knows. I think their priofit last year was 30 million so even if they stashed away their entire profits for 10 years that wouldn't go far down here.

[yachtie10]

fuckin trific... ha ha haaaaaaaaaaaaa (http://nz.news.yahoo.com/a/-/top-stories/9151551/ami-bailout-could-cost-1b/) who owns AMI? and how much are they supposed to have in reserve to be able to cover the potential debt they have?

bah bah black sheep :innocent:

did you actually read it?
I see that they think they have enough reserves to cover christchurch but may not have the cashflow to cover other claims.
They cover 30% of christchurches residential claims
how much reserves do you think they should have
How much reinsurance is more the point

And yes I as a policy holder own part of the company. Which worries me if my home burnt down now would my claim be honoured

I wonder what your opinion of ACCs future funding was?

[kevie]

I guess the governments thoughts are to look after the victims in chch more than the seemingly bale out another poor company ..... BUT

One thought that comes to mind is ...... I always believed that to be an insurance company they had to have a certain equity to cover all possible claims in the event they went bust ?!?! isnt that what the delay is in selling ACC?? or am I old and confused (dont answer that)

One worry is .... now they have baled out AMI ..has the government now set themselves up to be obligated to bale out all the other insurance companies that may also plead hard-up over christchurch quake.... or any disaster in the future.

[cheshirecat]

MIght be a question of underwriting AMI so they can get reinsurance/raise capitol /have lunch.
I mean how many outfits here actually take earthquake/volcano risks seriously here.
When we had that Japanese Tsuami warning the Geonet website went down- really useful that is in an imergency.

We need these guys (http://www.dailymail.co.uk/news/article-1369307/Japan-tsunami-earthquake-Road-repaired-SIX-days-destroyed.html) - They will be finished soon so they could come over here for a month.

[Edbear]

I guess the governments thoughts are to look after the victims in chch more than the seemingly bale out another poor company ..... BUT

One thought that comes to mind is ...... I always believed that to be an insurance company they had to have a certain equity to cover all possible claims in the event they went bust ?!?! isnt that what the delay is in selling ACC?? or am I old and confused (dont answer that)

One worry is .... now they have baled out AMI ..has the government now set themselves up to be obligated to bale out all the other insurance companies that may also plead hard-up over christchurch quake.... or any disaster in the future.

As you say, the Govt. is trying to help the people affected. They do have strict criteria so any company crying poor has a few hoops to jump through. They don't just hand out a few million bucks on a handshake and she'll be right mate...

The company may have been blindsided by the enormity of the disaster but they will have some hard questions to answer.

[AllanB]

I've been with AMI forever and I'll stay with them. Been a great company to deal with all these years. I wish them a full recovery.

DITTO


Plus my house is stuffed so I have no choice as no one else will insure it until AMI fix it!

Sick of the fucking media wanking on about 'tax payer' money going to cover AMI - I've been paying taxes for the past 30 years I've been working.

Aucklanders moaning about AMI can stick their plastic Waka up their .......

[Grumpy Gnomb]

if people cancel their insurance with ami wont that mean less money they will have to pay claims and then they might have to call on the govt fallback position earlier

[AllanB]

if people cancel their insurance with ami wont that mean less money they will have to pay claims and then they might have to call on the govt fallback position earlier

Yeah, thinking the same mate - if the rest of NZ panicand pull their AMI insurance policies .........

[The Stranger]

Thanks oscar for clarifying. Now all i can say is the govt is bailing out a lemon with tax payer money.

Which would you prefer - the govt bail them out or a random selection of cantabrians get fucked up?

[The Stranger]

Plus my house is stuffed so I have no choice as no one else will insure it until AMI fix it!

Sick of the fucking media wanking on about 'tax payer' money going to cover AMI - I've been paying taxes for the past 30 years I've been working.

Aucklanders moaning about AMI can stick their plastic Waka up their .......

Thanks, but such humility is really not necessary.

[Oakie]

if people cancel their insurance with ami wont that mean less money they will have to pay claims and then they might have to call on the govt fallback position earlier

Why would you cancel? They have a government guarantee. No other company has that!

[mashman]

did you actually read it?
I see that they think they have enough reserves to cover christchurch but may not have the cashflow to cover other claims.
They cover 30% of christchurches residential claims
how much reserves do you think they should have
How much reinsurance is more the point

And yes I as a policy holder own part of the company. Which worries me if my home burnt down now would my claim be honoured

I wonder what your opinion of ACCs future funding was?

Yes i did read it. In my naivety, i thought an insurer had to have X amount of money for situations like this, assets "in hand" to cover the liabilities... if that's the case, and they didn't have enough and blew it coz they weren't covered for such an eventuality, then tought shit. Let them go to the wall. I don't want to pay any more tax to fund the rescue package. Pay out what it can, the use that $1 billion of our tax money to cover what AMI couldn't. Pissing about with it will only waste more time and money (and a fair chunk of that $1 bill will go towards "administration", not those who need the assistance). Bin it, pay the people directly... they might be able to afford a new insurer after that.

I too am a shareholder on more than 1 front and I don't want to subsidise a business that could easily have a 3rd "issue" wipe them out anyway. Waste of time and money.

but that's just mho

hmmmmm, ACC's future funding, let me see :innocent:

[marie_speeds]

Yeah, thinking the same mate - if the rest of NZ panicand pull their AMI insurance policies .........

But thta is what I think will happen after AMI went to the Govt and their financial probems were exposed in the media


Which would you prefer - the govt bail them out or a random selection of cantabrians get fucked up?

No I wouldn't want to see that happen...one of the reasons I couldn't get my head around it earlier was because when I look at people like my parents as well as others who have paid their insurance for decades without claims, I couldn't understand why there is no money in the kitty, when one assumes that say for the past decade only about 10% of policy holders woud make a caim, most minor, then surely there woud be something. But Oscar then explained how a company like AMI worked so now I understand the no money in the kitty probem.


Why would you cancel? They have a government guarantee. No other company has that!

ACC?

[Naki Rat]

We are AMI customers and intend to stay that way , especially now that they have a government gaurantee of sorts. What I'd like to know though is how much of an effect the EQC's dicking around with ridiculously low repair estimates has had on AMI's difficulties in estimating medium term commitments? :angry:

[davereid]

Yes i did read it. In my naivety, i thought an insurer had to have X amount of money for situations like this, assets "in hand" to cover the liabilities... if that's the case, and they didn't have enough and blew it coz they weren't covered for such an eventuality, then tought shit. .....
hmmmmm, ACC's future funding, let me see :innocent:

AMI did have about a billion dollars in reserves, its possibly more related to the fact that AMI were geographically unbalanced compared to other insurers - they carreid a lot of CHCH based risk. I am sure there are other insurers with a similar problem if Wellington or Auckland had a major disaster, it just happened to be CHCH.

ACC is different. As you are a customer on a compulsory basis, ACC does not need reserves. If they need more money, they simply hike premiums. You cant choose to be uninsured or go elsewhere, so reserves are not required.

Thats why ACC is as much as I hate to say it, best operated by Government, OR best completely abandoned.

Its NOT a model that can be operated at reasonable cost otherwise.

[Oscar]

Yes i did read it. In my naivety, i thought an insurer had to have X amount of money for situations like this, assets "in hand" to cover the liabilities... if that's the case, and they didn't have enough and blew it coz they weren't covered for such an eventuality, then tought shit. Let them go to the wall. I don't want to pay any more tax to fund the rescue package. Pay out what it can, the use that $1 billion of our tax money to cover what AMI couldn't. Pissing about with it will only waste more time and money (and a fair chunk of that $1 bill will go towards "administration", not those who need the assistance). Bin it, pay the people directly... they might be able to afford a new insurer after that.

I too am a shareholder on more than 1 front and I don't want to subsidise a business that could easily have a 3rd "issue" wipe them out anyway. Waste of time and money.

but that's just mho

hmmmmm, ACC's future funding, let me see :innocent:

You should have stopped typing after you admitted your naivety.

There is no $1b payout, the Govt. is providing a backstop in case claims escalate and also to provide some protection against a run of the company. A run that will be caused by uninformed and stupid comments such as yours.

[Woodman]

My house and contents and vehicles are all with AMI.
If a major earthquake or similar hits Nelson and munts my house, will I get anything from AMI?
Is it worth the risk staying with them?
I would rather change to another insurer and have them pay than have the gummint pay with money they don't really have.

[Oscar]

My house and contents and vehicles are all with AMI.
If a major earthquake or similar hits Nelson and munts my house, will I get anything from AMI?
Is it worth the risk staying with them?
I would rather change to another insurer and have them pay than have the gummint pay with money they don't really have.

The problem that AMI made in Chch was not buying enough re-insurance, and being overexposed geographically. However, even if they haven't changed their arrangements they still have $600m to cover any other catastrophe (and they are unlikely to cover 35% of the households in your area).

So the answer is they are unlikely to have to call on Govt. funds in your scenario.

However - if they suffer cash flow difficulties caused by mass cancellations of cover, they may struggle to pay day to day claims and expenses. It may also be too late now to rely on getting a premium refund.

[The Stranger]

You should have stopped typing after you admitted your naivety.


BWAHAHAHAHA that wont stop him.
In fact he's even more forthright when he knows fuck all - which co-incidentally is pretty much everytime he comments online.

I suspect mashman is actually an icecream seller from edgecombe.

[mashman]

AMI did have about a billion dollars in reserves, its possibly more related to the fact that AMI were geographically unbalanced compared to other insurers - they carreid a lot of CHCH based risk. I am sure there are other insurers with a similar problem if Wellington or Auckland had a major disaster, it just happened to be CHCH.

ACC is different. As you are a customer on a compulsory basis, ACC does not need reserves. If they need more money, they simply hike premiums. You cant choose to be uninsured or go elsewhere, so reserves are not required.

Thats why ACC is as much as I hate to say it, best operated by Government, OR best completely abandoned.

Its NOT a model that can be operated at reasonable cost otherwise.

Thanks for the explanations.


You should have stopped typing after you admitted your naivety.

There is no $1b payout, the Govt. is providing a backstop in case claims escalate and also to provide some protection against a run of the company. A run that will be caused by uninformed and stupid comments such as yours.

There is the potential for a $1 billion payout according to the government. OMG, i'm someone who doesn't understand how the insurance industry ticks... AMI should be kicked into touch! They gambled, they lost. Get yer fuckin hands of my taxes.


BWAHAHAHAHA that wont stop him.
In fact he's even more forthright when he knows fuck all - which co-incidentally is pretty much everytime he comments online.

I suspect mashman is actually an icecream seller from edgecombe.

You read me how you read me :)... I can asure you, I ain't your ice cream vendor.

[Oscar]

There is the potential for a $1 billion payout according to the government. OMG, i'm someone who doesn't understand how the insurance industry ticks... AMI should be kicked into touch! They gambled, they lost. Get yer fuckin hands of my taxes.





He said it could cost up to $1b - it could cost nothing.
There will certainly be no "payout" along the lines of SCF.

If you would stop worring about your own wallet for a minute, you should work through the ramifications of allowing that many claims to remain unpaid. Y

[Woodman]

The problem that AMI made in Chch was not buying enough re-insurance, and being overexposed geographically. However, even if they haven't changed their arrangements they still have $600m to cover any other catastrophe (and they are unlikely to cover 35% of the households in your area).

So the answer is they are unlikely to have to call on Govt. funds in your scenario.

However - if they suffer cash flow difficulties caused by mass cancellations of cover, they may struggle to pay day to day claims and expenses. It may also be too late now to rely on getting a premium refund.

Thanks for that, but I was just reading the Nelson Mail and consumer NZs chief exec sue Chetwin is saying that "AMI customers outside Christchurch should consider another insurer". Thats not going to help ami is it?

[mashman]

He said it could cost up to $1b - it could cost nothing.


And I said



There is the potential for a $1 billion payout according to the government


That could also mean $0. :yes:



There will certainly be no "payout" along the lines of SCF.


I never said there was.



If you would stop worring about your own wallet for a minute,


:rofl:, yeah, i was worrying about my wallet, and the wallets of others that are going to be out of pocket because a PRIVATE enterprise failed and is getting bailed out. If it was Bob's Chip Shop down the road, you wouldn't give a fuck.



you should work through the ramifications of allowing that many claims to remain unpaid.

I did and came to a completely different conculsion than you.

If it crashes, the govt will bail them.

To keep it afloat, the govt MAY have to bail them, in which case a 3rd decent earthquake and the govt will either bail them again, or let them go to the wall. ad infinitum. Hey, they're in insurance, it's a calculation game right? Well what are your calculations telling you now about the potential for a 3rd crisis (not trying to be scaremongering, tis a calculation i'm sure the insurance industry have done. Otherwise there wouldn't be any problem getting insurance right now, would there?)

They stay in business and we carry on as normal. It may eventually go to the wall because people have lost faith in the ability of the provider to payout in the event of another crisis. It may be that customers stay Brand loyal. Like that's gonna happen where it's their money involved... but ya never know.

Pointless the govt getting involved in all of the above, IF (imho) the result is that the business is likely to go to the wall because of no confidence. What are your odds Oscar? Do you reckon a bailout will save them?

Instead. Let AMI go to the wall. Pay off as much as they can and let the govt take the assistance package of $1 billion (they said the figure, not me) and pay out those that aren't covered. It may be less than $1 billion. It could be $0. All that's lost is a business. We can all buy insurance somewhere else.

[The Stranger]

And I said

That could also mean $0. :yes:
I never said there was.

:rofl:, yeah, i was worrying about my wallet, and the wallets of others that are going to be out of pocket because a PRIVATE enterprise failed and is getting bailed out. If it was Bob's Chip Shop down the road, you wouldn't give a fuck.

I did and came to a completely different conculsion than you.

If it crashes, the govt will bail them.

To keep it afloat, the govt MAY have to bail them, in which case a 3rd decent earthquake and the govt will either bail them again, or let them go to the wall. ad infinitum. Hey, they're in insurance, it's a calculation game right? Well what are your calculations telling you now about the potential for a 3rd crisis (not trying to be scaremongering, tis a calculation i'm sure the insurance industry have done. Otherwise there wouldn't be any problem getting insurance right now, would there?)

They stay in business and we carry on as normal. It may eventually go to the wall because people have lost faith in the ability of the provider to payout in the event of another crisis. It may be that customers stay Brand loyal. Like that's gonna happen where it's their money involved... but ya never know.

Pointless the govt getting involved in all of the above, IF (imho) the result is that the business is likely to go to the wall because of no confidence. What are your odds Oscar? Do you reckon a bailout will save them?

Instead. Let AMI go to the wall. Pay off as much as they can and let the govt take the assistance package of $1 billion (they said the figure, not me) and pay out those that aren't covered. It may be less than $1 billion. It could be $0. All that's lost is a business. We can all buy insurance somewhere else.

Please don't take this the wrong way, but you completely misunderstood Oscars response. Just for the hell of it, assume Oscar knows what he's talking about then see if you can figure out where you went wrong.

Oscar. S&P or Moodys rank insurers don't they?
Do you happen to know please the ranking of AMI and say Vero prior to the first quake?

[Oscar]

And I said



That could also mean $0. :yes:



That's what I said.



I never said there was.



You did actually.
You said:

Bin it, pay the people directly..





To keep it afloat, the govt MAY have to bail them, in which case a 3rd decent earthquake and the govt will either bail them again, or let them go to the wall. ad infinitum. Hey, they're in insurance, it's a calculation game right? Well what are your calculations telling you now about the potential for a 3rd crisis (not trying to be scaremongering, tis a calculation i'm sure the insurance industry have done. Otherwise there wouldn't be any problem getting insurance right now, would there?)

They stay in business and we carry on as normal. It may eventually go to the wall because people have lost faith in the ability of the provider to payout in the event of another crisis. It may be that customers stay Brand loyal. Like that's gonna happen where it's their money involved... but ya never know.

Pointless the govt getting involved in all of the above, IF (imho) the result is that the business is likely to go to the wall because of no confidence. What are your odds Oscar? Do you reckon a bailout will save them?

Instead. Let AMI go to the wall. Pay off as much as they can and let the govt take the assistance package of $1 billion (they said the figure, not me) and pay out those that aren't covered. It may be less than $1 billion. It could be $0. All that's lost is a business. We can all buy insurance somewhere else.

Don't you think that the Govt. did their sums before making the offer?
Do you seriously think that the Govt. would pay more money than there are claims to save a doomed company? The best outcome is that AMI get swallowed up by another insurer, and that the claims don't exceed the combined reinsurance cap + reserves. The worst is that the claims do exceed reinsurance and the taxpayer is involved.

What you don't seem to understand is the mutual ownership off this particular company. We're not talking about sharemarket speculation here - AMI is owned by it's policyholders - if you let it go bust it's the ordinary people that suffer.

[Oscar]

Please don't take this the wrong way, but you completely misunderstood Oscars response. Just for the hell of it, assume Oscar knows what he's talking about then see if you can figure out where you went wrong.

Oscar. S&P or Moodys rank insurers don't they?
Do you happen to know please the ranking of AMI and say Vero prior to the first quake?

There is Govt. site listing them all, I'll try and find it.

As far as it goes, AMI had a reasonable ranking as they have an acceptable amount of capital reserves. The problem was a catastrophic error in judgement in respect of reinsurance.

This may have been related to the fact that the rates offered by AMI have always been stupidly cheap (which may have put the pressure on to reduce expenses such as reinsurance premiums).

[mashman]

That's what I said.


So what was the reason behind highlighting the word "could"?



You did actually.
You said:


No I didn't. Because I also said



Pay out what it can, the use that $1 billion of our tax money to cover what AMI couldn't.


out of context much?



Don't you think that the Govt. did their sums before making the offer?


To what end? Please, with cherries on :yes:, please tell me what sums the govt have done?



Do you seriously think that the Govt. would pay more money than there are claims to save a doomed company? The best outcome is that AMI get swallowed up by another insurer, and that the claims don't exceed the combined reinsurance cap + reserves. The worst is that the claims do exceed reinsurance and the taxpayer is involved.


SCF? but they were covered by a guarantee (plus interest, plus inflation backdated.. :killingme), so yes the Govt would pay more just to save a company. How much do you reckon SCF or AMI will sell for? How much do you think it will cost to find a new buyer? (given the top lawyers and accountants will be required for a deal of this size :blink:)? All of that money could pay the policy holders that are currently claiming. Everyone else can go get another insurer (by default that will happen anyway, in all but 1 scenario). Perhaps, and due to a large amount of people seeking cover (how many policies do AMI cover?), the insurance market might become a tad more competitive with the smell of fresh blood in the water.



What you don't seem to understand is the mutual ownership off this particular company. We're not talking about sharemarket speculation here - AMI is owned by it's policyholders - if you let it go bust it's the ordinary people that suffer.


So I have come to learn :yes: - How will the ordinary people suffer?

[Oscar]

Please don't take this the wrong way, but you completely misunderstood Oscars response. Just for the hell of it, assume Oscar knows what he's talking about then see if you can figure out where you went wrong.

Oscar. S&P or Moodys rank insurers don't they?
Do you happen to know please the ranking of AMI and say Vero prior to the first quake?

AMI were A+ on 6/10/10 and subsequently downgraded to A-

Vero are (and were) A+

Here's the site:
http://www.isu.govt.nz/upload/40411/ratings.pdf

[The Stranger]

AMI were A+ on 6/10/10 and subsequently downgraded to A-

Vero are (and were) A+

Here's the site:
http://www.isu.govt.nz/upload/40411/ratings.pdf

Interesting then to see Vero mouthing off at AMI and at those accepting AMI's cheap policies.
I'm with AMI and I usually do look at the rating as a guide - hell what other guide does the average punter have?
So I feel one can hardly blame people for accepting the cheapest price under such circumstances.

Surely the rating agency deserves some of the responsibility and liability for this mess?

[Grumph]

Christ there's some crap being posted here....Oscar has the right of it as usual.
You can't blame the regulating agencies, a concentration of risk in the SI would pre Sept have looked as safe as anywhere in NZ - would you have concentrated risk in Wgtn ? AMI started out as SIMU which was SI based and historically most of their risk has always been down here.
Mashman, get real if the govt hadn't guarantee'd AMI - and basically thats all they've done - there would still have had to be a massive bailout of AMI customers here or we'd have been left bloody destitute and homeless....Yes, EQC is covering the first 100G but there's a bloody lot of people above that. If the ACT dicks had their way and AMI was left to sink you'd have had major social unrest to put it mildly. Personally, I'd have joined a march on Wgtn - and we'd have been armed....
You can't compare SCF to AMI - just on the numbers, SCF involved saving what ? 2 - 300 investors at most, very few of whom to my knowledge risked losing their homes.
If they'd let AMI go down and the reinsurances did prove inadequate the consequences could have been dire.
And BTW, according to some statements coming out AMI's level of reinsurance was at least as good as several others and better than some....

[mashman]

Mashman, get real if the govt hadn't guarantee'd AMI - and basically thats all they've done - there would still have had to be a massive bailout of AMI customers here or we'd have been left bloody destitute and homeless


I AGREE, that if the govt didn't offer a bailout package, that the current policy holders could be up shit creek. So the govt are prepared to bail out AMI to cover the claims of its customers. Bailing the customers out indirectly.

The result is the same, as you put it "there would still have had to be a massive bailout of AMI customers here or we'd have been left bloody destitute and homeless", because the govt would be bailing the customers out directly.

Both ways bail the customer out. Wether AMI survives or not, AMI's customers are covered. So, how is that a lose for the customers?

Worst case scenario. Everyone is covered because the govt is backing AMI wether it succeeds or fails. Individuals will have to pick up the phone and find a new insurance provider. Did i miss anything?

My Reasons for not saving AMI are simple

AMI generate $300 million in reserve over the next 3 years (ass hat figures). There's another big quake in Chch (touch wood it doesn't happen). Are AMI going to go under? Or are we going to bail them again?

Look, for all of Oscars postings (not digging at ya fella), I'm still yet to see 1 single tabgible reason to keep AMI afloat. The best he's posted so far is "AMI is owned by it's policyholders - if you let it go bust it's the ordinary people that suffer.", which as we now know, due to the each way govt bailout, is a crock of shit. We can all pick up the phone and choose a new insurer.

But please, hop on the bandwagon and play the man OR give me 1 good reason so that I change my opinion :yes:

[Oscar]

I AGREE, that if the govt didn't offer a bailout package, that the current policy holders could be up shit creek. So the govt are prepared to bail out AMI to cover the claims of its customers. Bailing the customers out indirectly.

The result is the same, as you put it "there would still have had to be a massive bailout of AMI customers here or we'd have been left bloody destitute and homeless", because the govt would be bailing the customers out directly.

Both ways bail the customer out. Wether AMI survives or not, AMI's customers are covered. So, how is that a lose for the customers?

Worst case scenario. Everyone is covered because the govt is backing AMI wether it succeeds or fails. Individuals will have to pick up the phone and find a new insurance provider. Did i miss anything?

My Reasons for not saving AMI are simple

AMI generate $300 million in reserve over the next 3 years (ass hat figures). There's another big quake in Chch (touch wood it doesn't happen). Are AMI going to go under? Or are we going to bail them again?

Look, for all of Oscars postings (not digging at ya fella), I'm still yet to see 1 single tabgible reason to keep AMI afloat. The best he's posted so far is "AMI is owned by it's policyholders - if you let it go bust it's the ordinary people that suffer.", which as we now know, due to the each way govt bailout, is a crock of shit. We can all pick up the phone and choose a new insurer.

But please, hop on the bandwagon and play the man OR give me 1 good reason so that I change my opinion :yes:

1. If AMI survives (which I doubt), they will simply buy more reinsurance (and probably increase their premiums) to protect against another disaster.

2. I have never said that AMI should be protected. It's the policyholders that need protection, as far I'm concerned AMI deserves to die.

[Grumph]

Doesn't matter which insurance co in NZ folds, the govt of the time will have to bail it out or see productivity drop and the economy take a major hit.
NZ is too small to take either.
Joking about productivity ? In ChCh at present I know of businesses who have found premises, still have staff and stock or machinery BUT can't get insurance to restart.
In ChCh and possibly greater Canty - not sure how far it extends - if you wish to change insurance co, no one is accepting new business that I've found.
If I'm wrong, I'd love to know....
I can see now how ancient cities came to be abandoned - they got sick of waiting for the insurance payout and just walked away....

[Flip]

1. If AMI survives (which I doubt), they will simply buy more reinsurance (and probably increase their premiums) to protect against another disaster.

2. I have never said that AMI should be protected. It's the policyholders that need protection, as far I'm concerned AMI deserves to die.

I agree with Oscar. WTF is the Government doing bailing up a private company?

I'm sorry but all those folks who insured with AMI should be fucked. Luck the Govt is underwriting AMI. AMI went to the market and could not cover the risk they should now have to take what is coming.

I had a bike insured with AMI many years ago. Hit a big patch of fuel spilt on the Auckland motorway during a rain storm, wrote the bike off. AMI claimed that it was my fault and declined the claim. I took them to court (insurance ombudsman) and won. AMI IMHO are the biggest bunch of cunts in the insurance industry.

[trustme]

I agree with Oscar. WTF is the Government doing bailing up a private company?

I'm sorry but all those folks who insured with AMI should be fucked. Luck the Govt is underwriting AMI. AMI went to the market and could not cover the risk they should now have to take what is coming.

I had a bike insured with AMI many years ago. Hit a big patch of fuel spilt on the Auckland motorway during a rain storm, wrote the bike off. AMI claimed that it was my fault and declined the claim. I took them to court (insurance ombudsman) and won. AMI IMHO are the biggest bunch of cunts in the insurance industry.

I'm sure there is logic in there somewhere, but I'm buggered if I can find it.

[ynot slow]

If they require $500,000 and have 500,000 policy holders(according to news)wouldn't each and every policy holder be prepared to add a measly $1.00 per month for coverage,end of bail out after 1 month,let alone doing it for 3-6months to ensure all is fine.

[Latte]

If they require $500,000 and have 500,000 policy holders(according to news)wouldn't each and every policy holder be prepared to add a measly $1.00 per month for coverage,end of bail out after 1 month,let alone doing it for 3-6months to ensure all is fine.

They require between $500,000,000 and $1,000,000,000 that would be between $1000 and $2000 per person.

[The Stranger]

I agree with Oscar. WTF is the Government doing bailing up a private company?


You can relax. AMI is not a private company.

[IdunBrokdItAgin]

Pull yer heads in - fuck me kiwibiker seems like the grange hill school of economics at times.

AMI had a viable re-insurance policy and was only caught out by TWO "extraordinary" eventS.

If their business model had charged more for extraordinary events you would have all called them as rip off merchants (due to higher premiums in market).

Mashman - I know that you are a sound bloke but your anti-nationalistic view is just astounding - I saw your thread prepping to accuse the government of baling out AMI shareholders, but since then you have found out they have no shareholders.

If AMI did have a parent company (most probably with shareholders) they would have bailed out AMI instead of the NZ government.

But there wasn't one and the government HAD to step in (I doubt labour would have not risked that election losing move either).

But the main reason for my post is the socialists attacking mutualism (which is my field of expertise). If you don't like mutualism then you might as well be a communist.

[mashman]

Mashman - I know that you are a sound bloke but your anti-nationalistic view is just astounding - I saw your thread prepping to accuse the government of baling out AMI shareholders, but since then you have found out they have no shareholders.

If AMI did have a parent company (most probably with shareholders) they would have bailed out AMI instead of the NZ government.

But there wasn't one and the government HAD to step in (I doubt labour would have not risked that election losing move either).

But the main reason for my post is the socialists attacking mutualism (which is my field of expertise). If you don't like mutualism then you might as well be a communist.


Very true, I have learned that AMI are Mutual and that they have policy holders and not share holders. I have generally ignored money and the trappings of through my life (shows eh :)), which does leave me open to getting things wrong. I'm not too worried about that, because generally there are people that will correct/educate me. And for that I am greatful.

Anti-nationalistic eh... that's the latest label is it? :rofl: will people ever stop throwing labels around just so that they can categorise someone's point of view? I don't particularly care for labels (although i have been guilty of throwing them around too), so Mutual, Private, Public etc... really doesn't mean shit to me.

It's how they conduct their business that matters to me. AMI may well be the best of the bunch, and due to "circumstances" have failed. The govt bailing them out makes no sense to me, especially as the bailout money, directly or not, goes to the same people.

I believe that it'd be cheaper to have AMI pay out what they can afford and have the govt cover the rest. Not have the money go into AMI to pay staff wages (yes job losses are hard, but people need houses and money to live with, that takes precedence imho) and not to cover "compliance" costs for take over purposes. Just pay out and then shut it down. It's a failed gamble.

[IdunBrokdItAgin]

I believe that it'd be cheaper to have AMI pay out what they can afford and have the govt cover the rest. Not have the money go into AMI to pay staff wages (yes job losses are hard, but people need houses and money to live with, that takes precedence imho) and not to cover "compliance" costs for take over purposes. Just pay out and then shut it down. It's a failed gamble.

Nope, you are discounting AMI's staff jobs. Any job lost is bad right now - whether government or private - I don't think people realise quite how bad things are in NZ right now - for those who are wondering - it was pretty much fucked after the rescission but the government tried to increase spend on infrastcutucture (like most other countires) but it will struggle to survive, and two friggin earthquakes in half a year have messed things up.

All I am saying there is a frigging huge force majour involved in NZ 's problems and people would do good to remember that.

[mashman]

Nope, you are discounting AMI's staff jobs. Any job lost is bad right now - whether government or private - I don't think people realise quite how bad things are in NZ right now - for those who are wondering - it was pretty much fucked after the rescission but the government tried to increase spend on infrastcutucture (like most other countires) but it will struggle to survive, and two friggin earthquakes in half a year have messed things up.

All I am saying there is a frigging huge force majour involved in NZ 's problems and people would do good to remember that.

Pah. That's piddly in comparison to the problems in Africa :shifty:. I understand that NZ is up to it's tallest follicle, otherwise they wouldn't be borrowing $300-350 million per week to service it... This isn't my first recession :). I watched my mum lose her house in the 80's, along with thousands of others as jobs went left and right. I don't take anything for granted along those lines, or at least try not to, and I don't think that many do, especially when the effects are in yer face day in day out.

When hasn't there been a force majeure? Perhaps not on as large scale, but they still exist in every day life and I think that's what people would do well to remember. Just because it isn't you, doesn't mean it isn't happening, but that force majeure is called ripping people off for financial gain, but that's life :blink: Hence let AMI die, pay those who need it... get a job like everyone else has to that's been made unemployed in Chch. C'est la vie.

[Grumph]

I think you need to come to ChCh and have your face rubbed in it......

[ynot slow]

They require between $500,000,000 and $1,000,000,000 that would be between $1000 and $2000 per person.

Sorry heard the report wrong with my arithmatic.$100 per month over a year per policy holder,sounds like we'll all be paying this much,but next quake maybe in any part of kiwiland,and I think all of us would be pissed if the insurance companies went broke and couldn't pay,hell people are still waiting for assessors.

[oldrider]

They own 225,000 domestic policies in chch itself, 10% of that is 22,500, so if they've used two lots of $600m re insurance, thats's an average of ~$53,000 per claim. Not unrealistic considering the damage.

Plus they insure some commercial stuff too.. i'd say the Govt did a very nice thing, but AMI shouln't have been charging ridiculously low premiums IMHO cos then they wouldn't be stuck like this.

I guess it's unfortunate that ithad to hit where they have the biggest market share

EDIT: Shit forgot about EQC contribution. Yea actually where the hell did their money go! The Govt chucks in the first $100,000 of house claims, then AMI can't pick up the rest so the govt steps in like a rich kids dad when the kids can't control their spending!

"AMI" stadium .... what did that cost them?

Now no Rugby world cup in Christchurch ..... what did that cost them?