Helping Kiwis recover from the next disaster
It’s the agency tasked with stepping in to assist Kiwi homeowners in the wake of a natural disaster. The Earthquake Commission, New Zealand’s natural disaster insurance provider for residential properties has applied all the wisdom and hard lessons of a decade spent dealing with a string of major natural disasters to reimagine itself, and in the process, take the stress out of making an insurance claim for New Zealanders.
This is the third of a five-part series highlighting the projects of finalists in the Business Transformation through Digital and IT category of the CIO Awards 2021. The awards winners will be announced in Auckland on November 23. This series is sponsored by CIO Awards sponsor ClearPoint.
A new business model, the result of numerous internal reviews and a public inquiry into EQC’s role in settling claims resulting from the Canterbury Earthquakes, now sees the Commission partnering with eight private insurance providers to give customers one point of contact when they make an insurance claim.
That’s a major departure from a system that for decades saw a dual-claim system in place.
Citizens whose homes or land were damaged in an earthquake, volcanic eruption, tsunami or other natural disaster, would lodge a claim with EQC for damages up to a capped amount, and then lodge a separate claim with their private insurer for items excluded.
That system was adequate in a typical year when the agency handled between 4,000 – 5,000 claims. Then came the Canterbury Earthquake Sequence, which between them generated 469,431 claims across 194,184 properties.
Josh Lindsay, EQC’s Chief Readiness Officer, joined the agency in January 2011, just weeks before the major quake that would destroy much of inner-city Christchurch.
“We went from around 20 staff to having close to 1600 in just over a year to deal with the volume of claims,” he says.
“The Canterbury Earthquake Sequence was an unprecedented series of events, and as an organisation our infrastructure and capacity was stretched well beyond its limits to deal with a scenario of that nature. The reality is the short comings in our response to that series of events created a number of issues for our customers, issues that we’ve been working to resolve ever since.”
The dual-claim dilemma
EQC was swamped with homeowners lodging claims and desperate to have their claims settled or their homes repaired or rebuilt. The dual-claim system’s weaknesses became painfully obvious. EQC and private insurers had to manage claims separately, creating inconsistencies and requiring many homes to be assessed multiple times over.
It took years for many claims to be finalised, causing undue stress and uncertainty for many homeowners. In November 2016, when the Kaikoura earthquake struck, EQC was determined to do better by putting the customer at the heart of its processes.
“We basically locked ourselves in a room with the insurance industry and said, how can we do this differently, how can we do it better?” says Lindsay.
A higher level of collaboration between EQC and private insurers to handle claims led to dramatically improved results.
Around 80% of the 40,000 claims resulting from the Kaikoura quake were resolved within a year, with a very low number of those claims reopened. While a different type of event by nature, this was a dramatic improvement from the Canterbury earthquakes. That experience, and the lessons learnt led to One EQC, the agency’s transformation initiative to change how it operates, which is underpinned by a major IT project that’s a finalist in the Business Transformation through Digital and ICT category at this year’s CIO Awards.
The project had two key aims – to create a single point of contact for a customer making an insurance claim in the wake of a natural disaster and create the capacity in the system to be able to handle 100,000 claims a year in the event of a significant natural disaster.
Data sharing deals
“The enabling component in bringing eight insurers together was the ability to safely and securely share and store data and use that data to enable the end-to-end claims experience,” says Jaron Shaw, EQC’s Chief Data Officer.
The new arrangement see’s EQC working in the background, playing an assurance and support role, with private insurers handling their customers’ claims directly. EQC created its Data Hub to pool claim-related information.
A crucial component of that was developing an API exchange that would allow information to be swapped with the various claim settlement systems employed by the private insurers. Over a four-month period, during the peak of the Covid-19 pandemic’s spread in 2020, EQC negotiated commercial terms with the insurers and agreed a data model for standardising data sharing.
The new “engagement eco-system” effectively allows the insurers to act on EQC’s behalf and integrate them into the agency’s workflows.
“We took this leap from using emails and spreadsheets and the risks and challenges that can go with that, to creating a safe bubble that our partners could come into,” says Shaw.
“We were actually building the Data Hub at the same time we were agreeing on the data model.”
Integral to the success of that process was getting buy-in from the EQC board, Chaired at the time by the late former Labour deputy prime minister, Sir Michael Cullen, who became a champion for the project.
In a pivotal meeting in Wellington, the team decked out an entire office floor to visually represent the proposed new way of working and the delivery plan that would get EQC there. After examining that, the Board sat down to consider the business case.
“We told them that we needed to be able to start straight away and have the flexibility to adapt the data model as we negotiated agreements along the way,” says Shaw.
“We’d had a difficult few years as an organisation so it would have been easy to be quite cautious. But we had great support from the Board. That was a massive win for us.”
Cloud-first and scalable
At the same time as implementing its Data Hub, EQC has been simplifying and modernising its IT systems, moving to a software as a service (SaaS) model, deploying Microsoft 365 for all its productivity needs, integrating its new systems with the Data Hub, and decommissioning numerous legacy applications in the process.
The secure Data Hub at the heart of the model will become the single data aggregation point for all EQC. It’s based on Microsoft’s Azure Cloud platform and is capable of scaling up to meet a significant increase in claims volumes.
While facilitating a better customer experience through more efficient claims processing, EQC is also focused on better planning for future natural disasters alongside other Government agencies, local councils, and the insurance industry.
“The data sharing and our loss modelling capability enables us to plan for different natural disaster scenarios,” says Shaw.
“It’s important that EQC can not only respond effectively to natural disasters when they happen but also enhances New Zealand’s resilience to disasters.”
The system went live at the end of June and had its first test with the flooding that hit the West Coast in July.
“I am sure those customers will reap the benefits of the model,” says Lindsay.
The New Zealand CIO Awards recognise individuals and teams who have shown leadership, innovation and foresight in their contribution to ICT and business.
ClearPoint are proud sponsors of the Business Transformation through Digital and IT award which honours the achievements of organisations that have successfully planned and executed a Business Transformation initiative or initiatives through the use of digital and disruptive technologies. By using technology to innovate and transform their business they have produced a range of benefits for the organisation. ClearPoint has a real affinity with this category as transforming any business today requires the right people, process, practices, culture, and of course the right technology.
The winner will be announced in Auckland on November 23, 2021.
ClearPoint is a digital design and engineering company, creating world-class digital solutions for NZ and Australia’s leading organisations.
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