A Dunedin City Council senior manager has flown to London
for meetings aimed at securing better insurance cover for $3.4
billion worth of ratepayers' assets.
Grant McKenzie, the council's group chief financial manager,
flew to England on Saturday for a ''pretty intense'' series
of meetings spread over three days, council chief executive
Dr Sue Bidrose said yesterday.
The trip aimed to improve existing insurance arrangements for
the council and its companies, which together had assets
worth $3.4 billion.
About $1.6 billion of those assets remained without insurance
cover following the Canterbury earthquakes, after
international reinsurers refused to cover underground assets
and the council refused to pay inflated premiums for
The council instead relied on self-insurance, funded to date
by $250,000 in premiums savings in 2011 and pre-approved
access to a $200 million loan, if needed.
In an emergency, the funds would cover the council's 40%
share of any repair bill required to obtain 60% support from
Dr Bidrose would not say who Mr McKenzie was meeting during
his trip, but he had been appointed late last year in part
because of his prior experience dealing with ''major insurers
Mr McKenzie, a chartered accountant, was also a former Allied
Press group accountant, University of Otago director of
financial services and company director.
He had spent the first few months of his new role studying
existing insurance arrangements across the council and its
companies, Dr Bidrose said.
That included what was and was not insured and what the
council's excesses and risks were, which would all be up for
discussion in London, Dr Bidrose said.
''He's looking for improvements in any, or all of those
areas, whether it be excess, whether it be extent of cover,
whether it be type of cover - he's just looking to see what
the opportunities are for a better deal for the city in
anywhere that he can find it, basically.
''He has gone over with an open mind as to how we could
improve the overall state of the insurance coverage for
Dunedin City Council and its entities.''
Insurance was an ''ongoing problem'' for councils across New
Zealand, including the DCC, in the wake of the Canterbury
earthquakes, Dr Bidrose said.
Council finance committee chairman Cr Richard Thomson said it
was hoped Mr McKenzie's trip could secure a better price but
also better ''value for money'' for council insurance.
''At the moment there's quite a bit of city infrastructure
that we can no longer insure.
''If we were to have a major earthquake now, we would have a
significant exposure to risk that we just can't insure
against in the New Zealand market.
''It may not even necessarily be cheaper insurance, but if it
covers a greater proportion of the risk then that would be a
benefit as well,'' Cr Thomson said.
Dunedin Mayor Dave Cull said Mr McKenzie had ''some
considerable expertise in this field'' and the face-to-face
meetings were ''a very cost-effective strategy''.
''He's seeking to get much better deals than you can get
here. My understanding is that if you don't turn up, they're
not interested in email.''