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 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

[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… ‎