New Zealand’s insurance sector is experiencing unprecedented demand from repeated extreme weather events less than two months into the year. At the same time, new developments in other areas also challenge the industry.The unprecedented Auckland Anniversary weekend floods, and further damage caused almost immediately afterwards by Cyclone Gabrielle, have had a significant effect on the insurance market. The Minister of Finance, Grant Robertson, told reporters that, in terms of insurance, the floods alone would be the biggest non-earthquake event that New Zealand had ever experienced. In this edition of Cover to Cover, we discuss the extent of the damage inflicted throughout communities and the subsequent impact on the insurance industry.
Retail insurers and banks are busy preparing for the upcoming Financial Markets (Conduct of Institutions) Amendment Act 2022 (CoFI Act) regime. We outline the principal requirement of the conduct regime – the fair conduct programme – and what financial institutions should be doing to prepare for the regime, which comes into full force in early 2025.
Forbes magazine recently reported a prediction by Cybersecurity Ventures that the global cost of cyber-crime will reach USD8 trillion in 2023 and will grow to USD10.5 trillion by 2025. The same article also reported that cyber-crime would be the world’s third-largest economy after the United States and China, if it was measured as a country. Our experts continue to reinforce the importance of protecting your organisation against cyber attacks. We discuss key risks and strategies to respond to an attack, as well as developing themes in this space locally and globally.
The Rules Committee (Te Komiti mō ngā Tikanga) has released its Improving Access to Civil Justice report. If implemented, the report’s recommendations will create widespread changes in litigation procedure in the High Court, District Court, and Disputes Tribunal for most civil cases. We consider some of the anticipated impacts of the report on insurance disputes in Aotearoa New Zealand.
The insurance industry should prepare for increased regulator enforcement this year. The Financial Markets Authority has indicated that it intends to take a harder line on regulatory compliance, particularly where customer outcomes are poor. We outline an example of the best approach to take when faced with a breach, as well as an approach to avoid.
We also provide insight into two case studies: a recent ruling by the England and Wales Court of Appeal on exclusion for losses caused by “pollution or contamination”; and a judgment from the High Court of Australia providing guidance on insurers’ rights of election. We hope you find this issue insightful and useful.