Floods boost SIMU claims

Press, 5 October 1984, Page 12

Floods boost SIMU claims

The Southland floods in January was the most significant disaster to affect the results of SIMU Mutual Insurance Association in its 58 years of business, says the chairman, Mr T. J. Chamberlain, in the annual report. Claims from members after the floods totalled $1.9 million, of which $1.74M was covered by catastrophe reinsurance protection. The processing of the 457 claims placed a considerable strain on the association’s staff in Invercargill and other offices, he said. The high average cost of the claims from the flood caused the annual average cost of each claim to increase 9.7 per cent.

Claims costs increased 9.2 per cent to $12,872,634, and these also included the net cost of the floods in Nelson and Marlborough in July, 1983.

Other trading costs increased 13.7 per cent, or $446,742.

Included are two new items which will have an impact on future results. Fire service charges, representing 21 months, and absorbing $604,123, were brought into account this year, and also management expenses of $53,862 for the provision of “Operation Identification” kits to contents policyholders have been brought into account. “This action is calculated to assist insureds in protect-

ing their major assets in future years and recognises the high level of burglary and theft, which in some areas has reached epidemic proportions,” Mr Chamberlain says.

The group net profit increased 60 per cent to $900,766 in the year to June 30, compared with the previous corresponding period.

The result is considered satisfactory, particularly because premium rates have stayed unchanged

since August, 1981, for motor business, and August, 1980, for other lines, he says.