Comments

David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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17/1/12

Andrew Hooker: Insurance Aftershock


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Andrew Hooker writes an article for interest.co.nz on how the indemnity period for many businesses will end on 22 February, one year after the February quake.  This will leave those businesses uncovered for further loss of profit.

Hooker comments on whether it is reasonable that insurance companies have still not decided on the fate of many buildings within the standard one year indemnity period:

"There are many possible reasons for the delay. Insurance companies blame it on many factors including the inability to rebuild while zoning is clarified, or a shortage of construction companies and engineers.

That may well be the case, but should the insurance company be able to delay for over 12 months particularly where the building used by a business is apparently irreparable?

Chain dragging?

A cynic might suggest that there are other reasons that the insurance companies are less likely to publicise:

• The longer the delay between the event and payment the more money the insurance company makes. If your claim is $1,000,000 then the insurance company makes (at say 8%) over $5,000 per month, $80,000 per year by keeping your money. With losses in the billions, the overall benefit to the insurance companies, or their reinsurers is huge.

• If the insurance company is having trouble paying, the longer it delays the more money it gets in the door allowing it to meet its liabilities out of future premium income.

• Many businesses made temporary repairs and got back to business, planning to get repairs underway once the dust settled. The trouble is, the indemnity period continues to tick away and now, nearly 12 months later, they face a serious problem when they have to close down for repairs at a time when their indemnity period has expired. In that case the insurance company will directly gain from the delay in commencing reinstatement."



tags: andrew hooker, canterbury earthquakes, insurance, indemnity period

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