Sir Maarten Wevers: Thank you very much Anne for that introduction. Kia ora tatou.
This was described to me by my EQC staff? as a closing address, and I said, “well who’s going
to do the draft.” And then they said, “oh you’ll have to do it yourself, on the basis of what you
hear and observe through the day,” so I thought that was very good advice, because it made me
pay attention to listen.
But also the nature of one of these sorts of events is that it brings together a whole lot of people,
most of whom, or many of whom I have met before; a wide variety of opinions. And the whole
point of it, of course, is a conversation for the purpose of encouraging further steps and actions.
Because this is not a previously prepared series of thoughts, it is a little bit random, so I just
hope you’ll bear with me as I share some thoughts about what we have been doing the last
couple of days.
We’re currently at the point of having repaired 68,500 houses in Canterbury in the last three and
a half years. People say five, but we couldn’t start building for the first 18 months, because the
ground was still moving. That has never been done anywhere else in the world. And
occasionally, I point out to people that actually repairing the houses themselves has never been
EQC’s job. We’ve been an insurance company and we cash-settle and we write you a cheque.
But flying over Christchurch with helicopters throwing cheques out the window after the
earthquake would never have worked. So it’s been an enormous challenge for us as an
organisation, which as we all know around the Board table, went from 22 staff to 1800 in the
space of a little over a year, and we’ve dropped 1000 again.
The point of that conversation is to say that the thing that struck me is that, for most of us in this
room, we’ve had a very personal engagement in what’s gone on in Canterbury. I mean it’s
affected our businesses, our people, our families in some cases, and our jobs. I remember very
well, Saturday the 4th of September 2010 when I had a phone call from Civil Defence and from
Pat who’s here, who worked for me at DPMC at the time. And then of course much more
tragically on the 22nd of February, I spent literally weeks at the Beehive bunker, doing the job
that Andrew Kibblewhite now does, running the National Emergency Response, and seeing the
help that poured in from across the country and across the world, and I’ll never forget that.
And I found that a very useful perspective to bring to the EQC table, because there’d been
enormous support extended to Canterbury from across the country, and internationally, in
financial and physical sense. But that’s because EQC, in itself, was a response to the terrible
events of 1929 in Murchison, 1931 in Napier and 1942 in the Wairarapa, which I’m sure because I think it was a 7.8 earthquake - would have shaken up this fault line pretty
devastatingly as well.
The thing that I’m eternally grateful for is that the Parliament of 1944 very wisely said, ‘we can’t
carry on like this.’ I grew up in Masterton, and I remember as a small boy the new Post Office
being opened in about 1957 or ‘58. And it was opened then because the previous Post Office
had fallen in the earthquake and there had still been a pile of rubble at the end of the war when
the soldiers came home. So we didn’t have the resources to rebuild, and the Parliament said,
we need another way, and they alighted upon the idea of a national disaster hazard insurance
scheme. We remain unique in the world in the extent of coverage that we provide, and the level
of support we can extend.
The support that EQC has had from the international reinsurers, and from the rest of
the insurance industry has been amazing. We ourselves are holding about just under $12
billion, $11.5 billion dollars’ worth of liability for residential houses. It’s been really really difficult,
as you all know. Four hundred and thirty five thousand claims. The third largest insurance event
in global history.
And Martin Kreft was saying to an audience here in Te Papa a couple of years ago that he had
found it very difficult to explain to the Board of Munich Re in Munich how a small town in an
island at the other end of the world had caused so much damage to the balance sheet of one of
the world’s biggest reinsurers. And the answer was, it’s because they buy your products, and
your time has come to pay.
So from EQC’s perspective and certainly from my perspective, I see EQC as being really a
response in 1945 in terms of risk and resilience, support, that emerged out of what I imagine
was a discussion a little bit like this, to a bunch of New Zealanders at that time. They said, ‘what
can we do to enhance national resilience and deal with risks going forward?’ And I think they
made an outstandingly far-sighted decision.
So the challenge, I always think, and I’ve said this to our board and to other people, including to
the minister, is what’s our legacy going to be, post-Canterbury? What are we going to do to
ensure that New Zealand is more resilient and better able to deal with risk going forward?
Because we all, in the community, live off the good decisions of those who went before us.
And I think we’ve got an opportunity now. The timing is right for us to say, in an appropriate way,
what is the mechanism by which we’re going to lift our game? And I loved your characterisation
of tā moko. How do we export the lessons from Christchurch even to Wellington? That’s a pretty
compelling concept. And it’s pretty difficult to argue that you shouldn’t do it. But I think there’s a
great responsibility on all of us in this room to make sure that that really does happen. And I’d
just like to say that on behalf of the EQC Board, we’re been discussing what our role should be
in relation to national hazard risk management now for 18 months or so. It’s in our statement of
intent. We don’t yet know what that role will be, but we certainly are willing to step up and do
more.
And as you’ll know from the conversations that we’ve had around there, including as Jill
mentioned last night, it was a joint venture between EQC and GNS that established GeoNet.
EQC funds professors of volcanology at Auckland, disaster management at Massey, economic
and disaster management at Victoria, building sciences in Canterbury. We invest more than $10
million a year in research. That’s not a part of EQC’s activity that’s widely known but we do that
for very good reason. Because if we understand more about our disasters and possible
mitigations, that impacts our ability to procure cost-effective, in fact relatively cheap, insurance
for home owners in New Zealand and thereby reinsurance as well internationally. The reinsurers
who come and talk to our Board meetings from some of the biggest companies in the world in
this space, they know all about GNS Science. They know about Tonkin + Taylor’s models. And
they have their own analysts go through and check to see whether the data that comes out of
their interpretation model will be sufficient for them to continue to extend reinsurance to New
Zealand. And they do and they have, without a blip, from the first earthquake.
In fact my predecessor in this role, Michael Wintringham, came to see me in the Beehive when I
was in my former role and he said, we’ve just had our reinsurance turnover after the 4 th of
September – it was the time of the year when we were renegotiating the contract, and
something which would normally take a couple of months – it can be seven pages of
documentation - was rolled over, the same terms, same conditions, in a couple of days with four
signatures on one fax sheet of paper. Because the reinsurers knew we’d been through a
disaster; they respected and had confidence in our systems and they said, ‘our job is to stand
behind you.’
And our view is that it’s the existence of well-regulated and efficient, broad insurance markets in
New Zealand – I’m thinking not just of EQC, but of the broad insurance sector – and EQC - that
has enabled New Zealand get through this. Because it was a crisis that hit at the time of the
GFC. And if we hadn’t had good insurance markets, there’s no way we would have been able to
get back on the horse as a country.