AMI Insurance began in
Christchurch
Christchurch (; ) is the largest city in the South Island and the List of cities in New Zealand, second-largest city by urban area population in New Zealand. Christchurch has an urban population of , and a metropolitan population of over hal ...
, New Zealand, in 1926 as the South Island Motor Union (SIMU), and grew to be the second biggest residential insurer in New Zealand. 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
Effect of Canterbury earthquakes
After the
Christchurch earthquakes of 2010 and
2011
The year marked the start of a Arab Spring, series of protests and revolutions throughout the Arab world advocating for democracy, reform, and economic recovery, later leading to the depositions of world leaders in Tunisia, Egypt, and Yemen ...
, there was uncertainty about AMI's financial state, due to doubt over obtaining sufficient
reinsurance
Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...
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 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 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
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. Perceived poor performance of that organisation led to some protests and a lawsuit, 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.
2020 closure of branches
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
Botany, also called plant science, is the branch of natural science and biology studying plants, especially Plant anatomy, their anatomy, Plant taxonomy, taxonomy, and Plant ecology, ecology. A botanist or plant scientist is a scientist who s ...
,
Te Rapa,
Mount Maunganui,
Wellington
Wellington is the capital city of New Zealand. It is located at the south-western tip of the North Island, between Cook Strait and the Remutaka Range. Wellington is the third-largest city in New Zealand (second largest in the North Island ...
,
Hornby, and
Dunedin
Dunedin ( ; ) is the second-most populous city in the South Island of New Zealand (after Christchurch), and the principal city of the Otago region. Its name comes from ("fort of Edin"), the Scottish Gaelic name for Edinburgh, the capital of S ...
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.
References
External links
Official website
{{Authority control
Financial services companies established in 1926
Insurance companies of New Zealand
Organisations based in Christchurch