28 Apr 2011

AMI moves to plug leakage of customers

8:01 am on 28 April 2011

Apprehensive that it won't be able to meet future claims, the government-backed insurer AMI is trying to stop more customers from cancelling their policies.

The company's chief executive, John Balmforth, has written to all its policy-holders saying that one or two competitors have tried - for their own advantage - to indicate that AMI is less than financially secure.

Earlier this month, the government agreed to a $500 million financial backstop package for AMI, after the insurer admitted it might not have enough in reserves to pay claims from the quake.

AMI's chief customer officer, Richard Hutton, now says he's concerned at a rise in the number of customers switching to other insurance providers.

Mr Hutton says more customers have cancelled their policies with AMI since the government package was announced, and the company wants to stem the flow.

In the letter, Mr Balmforth says that even though there's still uncertainty concerning the total cost of claims for February's Christchurch earthquake, AMI can meet current and future claims.

Mr Hutton says AMI will know by the second quarter of this financial year how much the earthquake will cost it in claims.