Publications
Annual Report
2005-2006
Statement of Service Performance 2005-2006
Following is a list of the Commission’s objectives and performance indicators from its Statement of Intent and indication of progress during the year.
- Claims Handling and Catastrophe Response
- Management of the Natural Disaster Fund
- Administration of the Insurance Scheme
- Public Education
- Research and its Evaluation
- Promotion of EQC and its Role
- Policy and Advice
- Financial Management
- Equal Employment Opportunity
Claims Handling and Catastrophe Response
All claims on the Commission are completed to the standards set within the Catastrophe Response Programme (CRP).
Performance Indicators
- Document expectations of each CRP external organisation and control performance through agreed standards of service. Check adherence either regularly or after use of the service, as appropriate.
Achieved. - Meet the Catastrophe Response Programme timetable for contract reviews, document revisions and exercises.
Achieved. Sixteen contracts/manuals reviewed and six training activities and exercises conducted. One real operation (Tauranga/Matata). - Liaise with local authorities through their Emergency Management Groups. Contact each Civil Defence and Emergency Management Group as it is set up and discuss the meeting of joint objectives related to managing repairs and reconstruction of housing.
Achieved. Fourteen liaison activities were carried out, including one session involving the Ministry of Civil Defence and Emergency Management and all Civil Defence and Emergency Management Groups.
Management of the Natural Disaster Fund
The performance of investment and protection activities is in accordance with best practice and within the terms of any Ministerial directive.
Performance Indicators
- Manage investments in accordance with the terms of the Minister’s directive for the investment of the Fund.
Achieved. - Improve the real value of the Fund (excluding cash held as working capital) over the medium term utilising a mixture of assets designed to:
- Achieve an average rate of return of at least 1% p.a. over the Crown’s cost of borrowing over a rolling 10-year period;
- Subject the Fund to no more than 1 chance in 4 that over any 10-year period the annual rate of return will be less than the Crown’s cost of borrowing.
- Meet or exceed the performance benchmarks set by the Board for individual investment classes and maintain the safe-keeping of assets in accordance with best practice.
Achieved. - Manage cash inflows from investments, reinsurances and other financial protection policies to ensure they are sufficient to meet all claims and other liabilities under foreseeable circumstances.
Achieved. - Use best practice for the transfer of insurance risk and financial protection of the Fund, which:
- With the Fund’s investment strategy, provides optimal cost/benefit and risk management;
- Implements a reinsurance programme providing sustainability over time against reasonably foreseeable events;
- Provides that reinsurance agreement terms and conditions can be altered annually in case the Crown determines a different risk profile under the natural disaster insurance scheme in the future;
- Controls the risk to the Commission of default amongst reinsurers by maintaining a weighted average claims payment ability rating of A or better (Standard & Poor's rating) over the overall reinsurance programme.
Administration of the Insurance Scheme
Fair and consistent administration of the scheme in accordance with Government requirements.
Performance Indicators
- Verify EQC premium payments through a programme of annual physical checks and commercial audits of every premium-paying entity.
Achieved. - Compile a database of insureds for statistical and analytical purposes if EQC is given the necessary authority.
- Maintain claimant service satisfaction levels, as measured by postal surveys based on recently settled claims, at, as minima:
Achieved. Actual for successful claimants – 81%,actual for unsuccessful claimants – 78%.For successful claimants 80% For unsuccessful claimants 75%.
EQC has not received the necessary authority to compile a database.
Public Education
Increased public awareness of the vulnerabilities and of steps that can be taken in the home to mitigate these; more households have taken precautions against damage from seismic events.
Performance Indicators
- Board approval of the annual plans of Te Papa Tongarewa and Auckland War Memorial Museum, maintenance of quarterly checks that plans are being adhered to and results achieved.
Achieved. - A public education campaign of:
- Television advertising from June 2005 to June 2006;
- Development of a natural disaster mitigation website;
- Development of a new brochure and fridge magnet for distribution to all New Zealand households by August 2005.
- Achieved. (Brochure and magnet distribution delayed until October because of election.)
- Improve the level of mitigation measures undertaken by householders in the earthquake zone, as measured by a telephone survey, from 60% to 65%.
Attained 50%.
Research and its Evaluation
In order to build safer communities, reduce the potential for damage caused by natural disasters as defined in the Earthquake Commission Act by:- Providing support for learning activities and research projects;
- Generating, disseminating and applying knowledge;
- Developing relevant skills and community capability.
Performance Indicators
- Carry out the contestable grants round in 2005 in accordance with the approved timetable and procedures, and monitor for satisfactory completion.
Achieved. - Respond to the GeoNet Review Panel report of 2 December 2004 by:
- Increasing EQC’s funding for the remainder of the 10-year contract entered into with GNS Science (formerly the Institute of Geological and Nuclear Sciences), to a level allowing full implementation of the originally designed network and services, subject to staying within the guidelines for EQC’s expenditure set by the Minister at the commencement of the project. Revised funding arrangements will commence from 1 July 2005 and will be based upon independently audited applications from GNS Science. GNS Science will supply an annual project plan for approval by the Board and quarterly reports of progress;
- Employing a staff member who is qualified and experienced in the relevant areas, by 30 November 2005.
- Work with GNS Science to seek co-funding support for the Research Foundation for projects on Wellington’s earthquake risk and the hazards posed by volcanoes. Maintain quarterly contact with GNS Science and respond within two weeks to requests to assist a funding approach.
Achieved.
Promotion of EQC and its Role
Increased knowledge and appreciation of EQC and its work in order to minimise confusion and misunderstandings which impede achieving better outcomes for claimants.Performance Indicators
(aditional to those listed under Public Education)
- Maintenance of the level of knowledge that EQC provides natural disaster insurance for homes, sections and house contents at 70% of those responding to EQC’s quarterly surveys.
Attained 62%. - EQC provides sponsorship of public exhibits and other methods that enhance awareness of the roles of EQC and natural disaster matters. Ten such sponsorships will be granted to June 2006, with an emphasis on the parts of the country outside the “earthquake zone” (from Hamilton south). Eight sponsorship opportunities arose and all were supported.
- EQC has four portable display stands. By 30 September 2005 a programme for their circulation to make them available to the public throughout New Zealand will be completed, including allowing for maintenance and updating.
Proved not practical to establish a formal programme but stands were made available to the public on request.
Policy and Advice
Crown policy with regard to EQC is in accordance with cohesive and sound risk management principles and commensurate with the Crown’s overall responsibilities.
Performance Indicators- Assist with the drafting of legislation to give effect to changes to the insurance scheme recommended by EQC in the timeframe required.
Achieved. - Develop, with Treasury, the concept of a sustainable Natural Disaster Fund and take any necessary action arising from any decisions made.
Treasury study postponed.
Financial Management
Financial reporting requirements are met and audit reviews show standards required by the Board have been met; expenditure is within the budget approved by the Board and Minister. Performance Indicator- EQC Financial Statements meet standards required by the Board, as attested by the Commission’s auditor.
Achieved.