IAG’s Ongoing Commitment to Canterbury

IAG’s Ongoing Commitment to Canterbury

Our thoughts are once again with the people of Canterbury this week following Sunday’s 5.7 magnitude aftershock.

We’re pleased to hear there haven’t been any reports of injury or widespread damage, and to date we’ve received very few claims as a result of the aftershock.

PROGRESS UPDATE

We continue to focus on the settlement of outstanding earthquake claims. As at today:

• We’ve received over 88,000 earthquake claims and have settled 85% of these

• We’ve received 8,782 over cap claims and have settled 76.5% of these

• We’ve settled 94.6% of commercial claims - 98.9% Business Interruption and 92.9% Material Damage

• We’ve settled 83.8% of residential claims

• We’ve paid over $2.8B in residential settlements

• We’ve settled over $5B in residential and commercial claims

• We’ve built 1,161 new homes and repaired a further 930*

• Monday will see the 1,000th home built through our Hawkins Canterbury Recovery programme

• We’ve cash settled over 4,600 claims enabling people to move on in their own time, on their own terms

• We have completed over 96% of our 22,000 under cap claims (paths, driveways, fences etc)

• 616 claims (or 7% of our total over cap claims) are in dispute and working through a formal process. * This is the number of homes ‘practically complete’, or complete to the point the homeow ner can move home. Claims remain open until ‘final completion’ when all accounts are paid and any building ‘snags’ are remedied. Settlement Strategy “In late 2014 we made the decision that any new claims going into our construction programme would be on a case-by-case basis, and would include vulnerable customers and those we determined to need the support of a reinstatement programme only,” said Renée Walker, General Manager, Customer Reinstatement. “We channelled significant resources into cash settling remaining claims. We still believe that this is an approach that supports the desire of many of our customers to move forward in a fair and timely way.”

Cash Settlements

IAG cash settlement offers are based on the full estimated cost of repair or replacement of damaged homes based on a detailed, professional scope of the damage, and including any extra policy entitlements. All IAG documentation is shared with customers who then have the opportunity to discuss their settlement with independent advisors.

Construction Programme

Our construction programme will be 95% complete as at June this year. As at today:

• We have 254 new homes in construction

• Just over 200 repairs are still in progress

• By June only 170 properties will remain in construction

Claims yet to settle

We have 2,086 over cap claims yet to settle, with the majority of these claims in construction (454) or engaged in cash settlement discussions. 210 claims remain in the ‘Pricing and scoping’ stage which is pre- construction or cash settlement discussion.

We received over 600 new claims from EQC last year and expect that we will receive over 100 more. While this number does impact on our ability to forecast our final end date we still believe we will be largely complete by the middle of this year.

IAG’s RESPONSE TO THE LIMITATION ACT

The Limitation Act gives you six-years to bring a claim, starting from the date of the act or omission on which the claim is based. It is designed to prevent historical cases ending up in court.

Due to the unique environment we are operating in, we have reviewed our application of the Limitation Act. We’ve taken the approach of ensuring that our customers can have peace of mind on this issue and continue to focus on reaching settlement of their claim, therefore June 2018 is the earliest date a Limitation Act defence would possibly be used by IAG. By that date, we fully expect almost all claims to be settled.

ENDS

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