21 Sep 2011

AMI's Nolan upbeat about capital-raising plans

10:06 am on 21 September 2011

Christchurch-based insurer AMI expects to sort out its capital-raising plans in the next couple of months, after posting an annual loss of $705 million because of earthquake claims exceeding its reinsurance cover.

Most of the shortfall relates to the 22 February quake, while actuarial rules mean AMI added an extra $229 million to cover the prospect of higher claim costs.

Chairman Kerry Nolan insists the business is solvent and viable, though the Government's revised $337 million financial support package remains part of the $2.3 billion in assets it has to ensure all claims can be met.

"We have no liquidity issues at all," Mr Nolan says. "We have nearly $2 billion of reinsurance monies which will be drawn down first, and after that AMI will put in its own reserves, and only after that would we call upon the Government - if by then we had not completed a recapitalisation programme."

Mr Nolan says however that AMI does not plan to draw on the support plan and it is well advanced on plans to attract fresh capital and bolster its financial position.

This could be anything from a minority shareholding, a joint venture or an outright sale, and Mr Nolan says the company will be dealing with interested parties and other investors in the next few weeks and a final decision is likely in the next few months.

He says the company has managed to all but stem the loss of customers it experienced after receiving a government support package in April.