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Speaker 1: Ever du for see Ellen Heather. I employed one hundred

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Speaker 1: and five people. I recently recruited a CFO. The top

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Speaker 1: runner was a woman. We had to pass on the

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Speaker 1: woman because she couldn't commit to traveling to our offices

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Speaker 1: in Taiwan and Vietnam, and she also had issues with

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Speaker 1: the weekly late call with management because it interfered with

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Speaker 1: her cooking dinner. Seventeen past six. Now, if your home

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Speaker 1: insurance premiums have gone up, sperrethal for owners of apartments

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Speaker 1: and also multi unit buildings, because it looks like they

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Speaker 1: have been hit extra hard. Genati Traine, as the Heralds

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Speaker 1: Wellington Business editor.

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Speaker 2: Hey you name Hey Heather.

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Speaker 1: How hard have they been hit?

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Speaker 2: Well? Pretty hard, And it really depends on where you live.

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Speaker 2: The Treasury recently surveyed a bunch of apartment and other

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Speaker 2: multi unit building owners. It only surveyed one hundred and

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Speaker 2: forty two of them, so quite a small sample size.

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Speaker 2: But from that group it found that in Wellington in

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Speaker 2: the five years to twenty twenty three, those premiums rose

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Speaker 2: by fifty eight percent, and in Auckland they doubled. Now,

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Speaker 2: by way of context, you know houses on standalone houses

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Speaker 2: owned and by people who live in them. Those premiums

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Speaker 2: only increased by thirty percent over that time, so we're

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Speaker 2: looking at thirty percent versus fifty eight or one hundred percent.

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Speaker 2: Now Wellington, particularly, those premiums were super high, about eight

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Speaker 2: two hundred dollars a year, much lower in Auckland at

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Speaker 2: about one eight hundred. Now, these numbers the Treasury colle

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Speaker 2: collected a little bit rope, you know, because that sample

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Speaker 2: sizes is small, But I think that that general trend

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Speaker 2: is there, those multi unit building premiums shooting up much

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Speaker 2: more quickly than regular insurance.

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Speaker 1: I'll tell you what I found fascinating was that the

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Speaker 1: respondents who were talking about they said that the earthquake

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Speaker 1: strengthening that they had done on their buildings hadn't lowered

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Speaker 1: their insurance premiums. Why not?

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Speaker 2: Yeah, you know, I think that is a real blow

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Speaker 2: because I know some body corps are sinking really large

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Speaker 2: sums of money into getting the buildings up to stand

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Speaker 2: in and you'd think if you do that, it would

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Speaker 2: make a difference. The insurers told the Treasury that actually,

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Speaker 2: just because a building meets the standards, the building standards

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Speaker 2: to make it really safe, doesn't mean to say that

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Speaker 2: that building won't be damaged. So the building could still

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Speaker 2: be damaged and therefore costs the insurer a lot, even

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Speaker 2: if it's built in such a way that keeps people safe.

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Speaker 2: So I think that that is a real blow. The

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Speaker 2: Treasury reckons that the amount you could save is only

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Speaker 2: about ten percent on your premium if you go to

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Speaker 2: all that hassle and expense to, you know, to get

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Speaker 2: your building up scratch.

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Speaker 1: This is fascinating again, and really quickly, why is Treasury

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Speaker 1: pairing back its monitoring of the insurance costs?

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Speaker 2: Yeah, you know, this had me scratching my head. Previously,

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Speaker 2: the Treasury got Finity Consulting, which is the scrip of actuaries,

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Speaker 2: to do these quarterly reports that go into much greater

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Speaker 2: detail than the survey we've just been talking about, really

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Speaker 2: sort of gnally stuff to see how much insurance is

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Speaker 2: costing and what the coverage is like. That has only

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Speaker 2: happening annually. Now I think that is probably a cost

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Speaker 2: saving thing. Also, the Treasury is no longer as interested

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Speaker 2: in monitoring how the private insurance market is responding to

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Speaker 2: EQUC doubling its coverage. So in twenty twenty two, EQC

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Speaker 2: took on a whole lot more risk. Everyone was worried

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Speaker 2: that if that happened, the insurers wouldn't actually cut their premiums.

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Speaker 2: That didn't actually happen, which is why the Treasury was

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Speaker 2: monitoring it, So it's pairing that back. The thing I

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Speaker 2: think is significant here is that the government is acknowledging

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Speaker 2: that it can't really do anything about this risk based pricing,

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Speaker 2: the fact that some property owners face very, very high

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Speaker 2: insurance bills. In fact, the government is happy for this

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Speaker 2: to happen because if insurers kind of do the dirty

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Speaker 2: work making people who live in risky properties pay more insurance,

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Speaker 2: that encourages people move to move to safer areas, which

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Speaker 2: means if there's a storm or something bad, the government

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Speaker 2: doesn't effectively have to bow out those people. So that

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Speaker 2: government is actually quietly happy for the insurance industry to

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Speaker 2: do a lot of the heavy lifting encouraging people to

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Speaker 2: move to safer places.

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Speaker 1: I see that makes sense, Jine, Thanks very much, appreciate it.

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