AMI’s unwavering commitment to customer care is characterised by the feedback and the smiles we receive from our customers. At AMI a smile is recognition for a job well done. It reflects the team effort that comes from the staff in our branches and call centres supported by their colleagues in our Head Office divisions. In this year’s ‘Smile Report’ we are pleased to be able to share with you some of the many examples of how our delivery of customer care is recognised by our customers and business partners . . . with a smile.
Uncertainty in financial and investment markets and weather related events that have been a feature of recent years have again made this year a challenging one. The country weathered several severe storms which had a significant impact on the lives of our customers. These events and the influence of the economic conditions created uncertainty for some of our customers and tested their reason to smile. We were pleased to be able to reduce their uncertainty and, notwithstanding the increased level of claims and reduced returns available from investment markets both locally and internationally, strengthen the security for our customers with a strong financial performance.
Throughout this, AMI remains strong and steadfast – a company that our customers can rely on to be there for them should they need us. The certainty we provide our customers has been endorsed again this year by confirmation of our ‘A+’ (Superior) rating from international rating agency, A.M. Best Company.
Our focus on our mission is unwavering:
Through our total commitment to what our customers need, want and value, we will be recognised in our selected markets as the leading provider of Customer Care.
We put people ahead of things and our staff are known for ‘going the extra smile.’ It is their professionalism, dedication and enthusiasm which creates the smiles for which we are known. I strongly and sincerely endorse the Board’s thanks and recognition of the outstanding effort of my colleagues again this year.
It is our staff, together with our trade and business partners, who have ensured we have delivered on our promise to:
HIGHLIGHTS
In what have been described as turbulent times it is good to be able to report positive highlights which have included:
• Recognition of the care AMI provides, resulting in excellent growth in both customer and policy numbers.
• Continuing acknowledgement of our motor vehicle insurance with five star ratings in six out of a possible seven categories in a survey of this type of insurance by a leading consumer organisation.
• Creating 17 new positions, taking our staff numbers to 788.
• Winning the ‘Services to the Community’ category for the second time at the Australasian insurance industry awards, the 2009 Australia New Zealand Institute of Insurance and Finance Awards, for our sponsorship and community activities.
• Being voted by our staff as a ‘Best Workplace’ in the 2009 JRA Best Workplaces survey. We are the only company in New Zealand to have appeared as a finalist in all ten surveys conducted to date.
• Winning an internationally recognised Gold EFFIE® for Corporate Reputation and a Silver EFFIE® for Consumer Services for our ‘Smile’ and ‘Through the Ages’ advertising and communications campaigns.
• Facilitating the personal development of 192 staff through in-house and external training and supporting 32 staff with extra-mural study.
• Having a team of AMI colleagues come runner-up in the 2008 NZIM Business Challenge. In total, 10 teams from AMI competed in the national competition and five made it to the semi-finals.
DELIVERING THE SMILE
When it comes to putting smiles on the faces of our customers, nothing beats being ‘local’ – being in a position to talk to our customers, face to face, no matter where they live in New Zealand. With 73 branches and 22 agencies, supported by two call centres, we take pride in the fact we have the largest company-staffed branch network in the New Zealand fire and general insurance industry.
This year, as part of our continued development of the ‘Taking Customer Care to New Heights’ programme, we introduced some changes to our organisational structure. These changes have seen the creation of an expanded Customer Division under the leadership of a Chief Customer Officer (CCO) to provide even more focus on our Customer Care strategy. I am very pleased to announce the appointment of Richard Hutton, previously Executive Manager - Information Support, to the role of CCO.
Our new Customer Division brings together all customer-facing areas of our business including our branch and call centre operations and our national assessing activities. Creation of a new department within the Division to focus on ‘online delivery ‘of customer care recognises the growing importance of this channel for our customers. Ensuring that our operational procedures reflect the most effective way of delivering Customer Care is the mandate of the Division’s Procedures and Effectiveness department.
To make sure we have an up-to-date understanding of our customers we undertook a major project during the year to update our customer records. We would like to thank all those customers we contacted for their positive assistance in this project. This work forms the basis of an increased effort to provide our customers with an enhanced experience in the way we communicate with them. The CCO also has responsibility for this activity.
Continued customer and policy growth has meant the relocation and expansion of several branch premises. Whakatane Branch Manager Matt Crawford used the expansion of his branch as an opportunity to show support for the Whakatane Toy Library.
Matt said, “We are really proud to be part of the local community which is why we decided to make our refurbishment a real community event. We held a week of fun family activities at the Branch, from face painting and animal balloons to a magician and sausage sizzle. Entry was by gold coin donation and all proceeds went to the Whakatane Toy Library.”
Post balance date our Botany Town Centre Branch relocated to more spacious premises. The Branch’s Manager Fraser Robb said, “Botany Town Centre has fantastic parking and easy access for our customers. Our new premises are lighter, brighter and, because we’re only two doors down from our old location, it’s really easy for everyone to find.”
Supporting our branches are our call centres in Christchurch and Auckland. While they are located on different islands, our investment in technology means they operate as one ‘virtual’ call centre. For our customers, that means calls are answered more promptly, no matter what time of the day or night.
We continue to upgrade our website ami.co.nz as part of a wider strategy to support online customer contact. This year we launched improved facilities so our customers and potential customers can source quotes over the internet more quickly and easily. We are also doing a lot of work, behind the scenes, to develop our systems for managing customer information. These developments will help with future initiatives as we strive to improve the way we care, assist and deliver.
Our commitment to Customer Care means being there for our customers when they need us most. It also means providing customers with information and resources to make things that little bit easier. After all, it is often the small things that can make a big difference.
This year we developed ‘Frost Aid – tips for safe winter motoring’, a booklet filled with handy hints to help our customers drive through winter with a smile. Ice scrapers and microfibre cloths were also distributed to help take some of the inconvenience out of chilly mornings. For many of our customers with holiday homes in colder areas we sent out a special pre-winter checklist with helpful suggestions on things to do to avoid property damage over the winter months.
With more than 450,000 customers and in excess of 7.5 million customer interactions a year we have plenty of opportunities to make people smile. The AMI team relishes the opportunity to accept that challenge.
SMILING IN GOOD WEATHER AND IN BAD
The opportunity for us to make many of our customers smile arises from day-to-day interactions in attending to their insurance policy needs or those situations where an accident, house fire or burglary means AMI’s support is required. We are there when our customers need us.
For others the opportunity can arise in more dramatic circumstances because of natural catastrophes or freak weather happenings.
The last financial year was no different, with a series of significant and damaging storms pummelling the country. Towards the end of July 2008 what the MetService referred to as ‘no ordinary storm’ raged the entire length of the country. National Assessing Manager Laurie Brady said, “The difference with this storm was the nature of the damage it caused and its path down the country. Storms normally hit one area then move out to sea. This time the weather travelled practically the entire length of New Zealand causing damage to our customers’ homes, contents and motor vehicles.”
The Nelson/Marlborough region was particularly hard hit, with strong winds of up to 160kph causing extensive damage to customers’ properties. Nelson Manager - Customer Services Vicki Beauchamp said, “For a place like Nelson, which usually enjoys good weather, this was a major event for us. It was a bad day that got progressively worse – the wind just grew in intensity.”
To help ensure customer claims were dealt with as quickly as possible, AMI’s specialised Event Response Team was mobilised to provide support and additional resources to the Nelson Branches. The Event Response Team was in action again in November when hail hammered Ashburton. Ashburton Branch Manager Veronica Rabbitt said, “As soon as the hail stopped our phone lines started ringing and they just didn’t stop.”
Within a week, and with the assistance of local suppliers, AMI had set up a Paintless Dent Repair (PDR) centre in Ashburton and recruited 10 PDR technicians from New Zealand, Australia and America to help repair the more than 2,000 vehicles damaged in the storm. Using a combination of the PDR process and local panel repairers we were able to repair and return customers’ vehicles to them quickly.
Sometimes weather events can be very selective in the customers they affect. On 17 October 2008 some Cambridge residents had an early morning wake-up call as a tornado ripped through the town. AMI customer, Mr Bretherton, was unlucky enough to be caught up in the middle of it all. “I woke up to a shocking noise that reminded me of an old steam engine travelling flat out through a station. Then all of a sudden the noise stopped and there was an eerie silence. I got up and had a look around but it was still dark and I couldn’t see much so I just went back to bed. About an hour later I woke again, this time to the sound of dripping water. I turned my light on to find water running down the walls and through a crack in the ceiling. As it turns out, half my roof was gone and it was now bucketing down with rain!
“Later that morning I gave AMI a call. Before I could put the phone down the assessors were on the job. I spent a couple of nights at the motel down the road while the house got a new roof and the bedroom dried out. AMI couldn’t have been more helpful,” said Mr Bretherton.
While the destructive forces of the weather can wipe the smile off anyone’s face, this is the time when AMI’s commitment to customer care really comes to the fore. It also helps to be local – because we are right there, in the community, we not only have a genuine understanding of what our customers are going through, we are also in the best position to assist them to deal with the situation. Our ability to use our local staff, Event Response Team and our network of very professional and trade-qualified Motor and Home Assessors, supported by their Call Centre and Head Office colleagues, ensures that, when weather does wreak havoc, customer claims are dealt with as quickly as possible. We also gratefully acknowledge the support we get at all times from local tradespeople and suppliers.
CLIC CAR INSURANCE - MAKING CAR LOVERS SMILE
CLIC Car Insurance – the Car Lovers’ Insurance Company – is now in its third year of operation and continues to go from strength to strength. A wholly owned subsidiary of AMI, CLIC specialises in tailoring policy terms and conditions for nonstandard motor vehicles to meet the individual customer’s circumstances and vehicle specifications. The CLIC team are car enthusiasts themselves so CLIC customers know they are dealing with like-minded people who understand the love they have for their cars.
“At CLIC we can quote on any private motor vehicle insurance, regardless of the type of vehicle or the customer’s driving record,” said CLIC Manager, Melanie Elliott. “We take a much more detailed and transparent approach to underwriting. This means the total risk is established at the time of writing the policy rather than exposed when a claim is made. Our customers can have confidence that they are covered because all modifications and accessories are individually listed.”
CLIC is now able to give the green light to even more car lovers with the introduction of its OCTANE policy which provides a four-weekly contract option. For customers who prefer knowing that their insurance is paid up for longer than four weeks at a time, CLIC continues to offer six and 12 month policies under the renamed NDURO cover.
“OCTANE is just another way we are showing our CLIC customers the Customer Care philosophy that has traditionally been missing from the non-standard car insurance market,” said Melanie. “In the coming year we have more developments planned which will continue to build on the benefits we offer our customers.”
FINANCIAL STRENGTH PROVIDING SECURITY
Our customers are at the centre of our business – they are, after all, our owners. As a wholly New Zealand owned mutual company we are answerable to our customers, not offshore shareholders, which means we can focus solely on providing value and security for our policyholders. It also means all our financial returns are reinvested in the business.
While our comprehensive reinsurance programme provides protection for major catastrophic losses we still have to contribute to such losses. This year’s weather related events saw us meet $7.8 million in claims from this source. With total claims numbering 220,463, an increase of 12.8%, Total Claims Costs rose by 9.8% to $208.4 million.
As mentioned in the Directors’ Report the replacement cost of claimed items continues to increase, especially rebuilding repair costs where rising costs over successive years have exceeded both the level of inflation and the adjustments made in premiums for our home insurance products.
Despite excellent control of management expenses by the AMI team, which saw the Management Expense Ratio decrease marginally from 25.6% to 25.3%, our Net Underwriting Profit reduced to a level which necessitated some upward adjustment in premiums. Reflecting anticipated claims activity and costs, further increases will be required during the 2009/2010 financial year. Notwithstanding these increases, AMI will still offer competitive premiums over the full range of our products.
With Written Premiums increasing by 8.5%, in the main due to excellent net policy growth, the recording of a Net Surplus After Taxation of $18.5 million was a sound result.
The Net Surplus added further to our Trust Funds, the company’s equity, which was $333.8 million as at 30 June 2009.
The Solvency Margin, which is traditionally regarded as an indicator of an insurance company’s financial strength, stood at 114.3% which places AMI’s solvency near, if not at the top of, companies in the New Zealand fire and general insurance industry. At that level AMI provides very good security for policyholders.
SMILES IN THE COMMUNITY
As a mutual company we have a unique perspective on what it means to give back to the community. For AMI, our sponsorship and community support portfolio is more than just corporate responsibility – it is a tangible expression of our commitment to Customer Care. It extends beyond the insurance relationship, bringing together staff, customers, suppliers and the wider community.
AMI prides itself on supporting those communities which support us . . . and we’re in for the ‘long haul’. We understand that, even in good times, it is hard work keeping ‘not for profit’ groups running, so when the economy takes a turn for the worse it becomes even more important to show our commitment. We partner with organisations whose objectives positively enhance the New Zealand way of life. AMI currently has more than 200 sponsorships and community initiatives throughout New Zealand, ranging from grassroots projects to nationwide campaigns.
This year we began our support of netball in the greater Auckland area. We are now the principal sponsor of both AMI Netball North Harbour and AMI Auckland Netball which collectively have more than 30,000 members and spectators at their centres each week during the netball season.
Meredith Cotty, AMI’s Sponsorship and Community Involvement Manager said, “Passion, drive, commitment, optimism, teamwork – these are all values shared by Auckland Netball, Netball North Harbour and AMI. Having these aligned values makes this more than just a sponsorship. It’s a partnership between organisations that are focused on making these communities a great place to live.”
This year to support our sponsorship of Canterbury Rugby and the Crusaders, we developed the ‘AMI Crusaders Kids’ promotion, an innovative programme of fun, educational activities for primary schools in the Crusaders territory. A total of 260 classes completed a series of educational, Crusaders-related activities and went into the draw to win prizes ranging from Crusaders merchandise to AMI Stadium visits and classroom visits from Crusaders players.
As part of our ongoing support of Parents Inc., we launched a joint project, MyStory. MyStory is a specially designed book to record a child’s life story in words and pictures. It comes in a custom-made box to hold all those shells, drawings, stickers and other childhood treasures. According to Parents Inc. Chief Executive Officer Bruce Pilbrow, MyStory is a celebration of what both AMI and Parents Inc. believe in – community and the family. “When your son or daughter comes home from a bad day at school you can sit them down and get them to read their MyStory. The process of looking through the book, with all its photos and memories, sends the subtle message that someone really does care about them and love them.”
As in previous years, AMI provided a significant contribution to the Malaghan Institute of Medical Research’s annual fundraising drive and charity golf tournaments. We also purchased a ‘RotorVapor’ system, a state of the art system which safely synthesises active molecules for use in the Institute’s research into asthma, infectious diseases and cancer.
We recognise the importance of the arts within a community and the role they play in fostering creativity, innovation, participation and personal achievement. For this reason AMI is very pleased to be able to contribute to the ongoing success and development of the Christchurch Symphony Orchestra (CSO). AMI has been the Principal Sponsor of the CSO since July 2001 and the naming rights sponsor of the AMI Proms Series since 1999.
We also recently extended our support to the Vector Wellington Orchestra. As well as sponsoring the 2009 AMI Summer Symphony at the Basin, we supported the 2008 AMI Pop Star Series which featured concerts by well known New Zealand musicians, Che Fu and Dave Dobbyn.
Vector Wellington Orchestra General Manager Diana Marsh said, “AMI’s sponsorship has enabled the Vector Wellington Orchestra to reach new audiences and strengthen bonds in the wider community. The partnership with AMI has been hugely successful and one the orchestra highly values.
”Staff involvement in AMI’s community activities is what helps to make them work. This is very evident at the local level. Whether it is supporting young thespians through the Auckland Community Trust Theatre Awards or helping to raise money for Ashburton District’s Neighbourhood Support and Community Town Watch, our staff have taken the initiative to show their support in both a financial and personal sense.
INSURANCE INDUSTRY REGULATION
In my review last year I foreshadowed that regulation of the insurance industry was in the pipeline. Since then we have seen a raft of legislation which will impact on our operations.
The Finance Service Providers (Registration and Dispute Resolution) Act 2008 will require AMI to be registered as a financial service provider with the Companies Office and be a participant in a disputes resolution scheme. Neither of these obligations poses any concern for us. We are currently a participant in the Insurance and Savings Ombudsman Scheme so are accustomed to having our internal customer advocacy processes subjected, where appropriate, to independent review by a third party.
As a measure of protection for consumers, the Financial Advisers Act 2008 has been assented to with regulations to support the Act currently being developed. Provision is provided under the Act for organisations such as AMI to seek accreditation as a Qualifying Financial Entity. With such accreditation AMI will take responsibility for the actions of our staff, relieving them of the responsibility of becoming licenced financial advisers in their own right. In AMI’s view careful drafting of the regulations will be required to ensure only suitably qualified people are authorised to sell fire and general insurance products. The benefits of this important legislation will be lost if staff working for companies whose primary purpose is not the underwriting of insurance or processing of insurance claims are permitted to carry out such activities without meeting the same qualification as insurance company employees.
The draft Insurance (Prudential Supervision) Bill and an accompanying draft Solvency Standard have been released. AMI has made submissions on both parts of the proposed regulatory framework. As indicated in the Directors’ Report, AMI supports the intent of the regulation and does not anticipate any significant issues in complying with what we anticipate to be the final requirements. However, we do have grave concerns that the final forms of both the Bill and the Standard will give rise to uneven treatment of New Zealand owned companies, such as AMI, compared with overseas owned companies such as the local operations of Australian owned companies.
There is evidence to support the view that a strong indigenous insurance industry is essential to ensure market practices operate in the interest of domestic stakeholders. Anything less than an even playing field, with all insurers having to meet the same capital and operating requirements, will be to the detriment of New Zealand consumers. AMI urges the Government and the Regulator to declare, unequivocally and immediately, that the same prudential requirements will be required of all fire and general insurers operating in this market.
AMI remains a member of the Insurance Council of New Zealand and has been actively involved in the ICNZ’s submissions on the regulatory framework, although on some aspects expressing views at variance with those of the ICNZ in our submission.
AMI’s review of the forthcoming regulation has been assisted by our continued membership of the International Cooperative and Mutual Insurance Federation (ICMIF) of which I am the Chairman. Representing 220 cooperative and mutual insurers around the world, ICMIF has been involved in the development of insurance regulation, especially as it relates to the mutual form of ownership, in a number of overseas jurisdictions.
OUR PEOPLE CREATE THE SMILES
In order to be the leading provider of Customer Care you need an exceptional team of committed staff. At AMI, it is our people who make the difference. It is the way in which they care, assist and deliver which keeps our customers smiling.
The ongoing personal development of staff remains a focus for AMI. This year 32 colleagues were involved in extra-mural study through our study assistance programme. A total of 192 people completed external training programmes while 24 attended three two-day in-house leadership workshops. We also welcomed 128 colleagues onto our two-day Orientation programme, while 59 attended our very successful Investment in Excellence course.
Safe work practices are a priority for AMI and the Health and Safety team work hard to ensure colleagues around the country are aware of their health and safety responsibilities. This year 37 colleagues completed Workplace First Aid Courses while nine new managers from throughout the country completed Health and Safety training.
With the outbreak of H1N1 influenza in June 2009, AMI put in place the first steps of our pandemic preparedness plan. With a focus on minimising the spread of infection, our aim is to ensure the safety of our colleagues so we can continue to provide the best possible Customer Care to all our customers – both external and internal. Deployment of the pandemic procedures went according to plan with positive feedback from staff and family members about the comprehensive response from the company.
Post balance date we launched the myhealth wellness gateway, the culmination of many months of work and an exciting new initiative for the company. All colleagues now have access to an online wellness resource containing everything from practical information on health and wellbeing to an up-to-date database of health and exercise-related events happening around the country. As part of the initiative, many colleagues have taken the opportunity to complete a confidential, personalised health report to find out their current state of health and things they can do to improve it.
Last year we held our first amies Annual Awards, the culmination of our internal recognition programme, the amies . The amies is a programme for staff, run by staff, to celebrate the achievements of staff. This year 39 people were awarded amies awards for their outstanding Customer Care. This year’s Annual Awards were held in Wellington in October.
We continued the development of our internal engagement programme, myami, with the release of some significant changes to our intranet, mysite. The changes were made as a result of staff interviews and are designed to improve the user experience by making the site more useful and information easier to find. Feedback on the new-look site has been very positive.
AMI is a principal sponsor of the Australia New Zealand Institute of Insurance and Finance (ANZIIF) ‘Generation-I’ programme for young insurance professionals (under 35 years). Eligible AMI colleagues attended a series of five Gen-I events throughout the country which mixed social events with professional development opportunities. Ten teams from AMI participated in the 2008 New Zealand Institute of Management Business Challenge. Five teams went on to compete in the semi-finals with one team coming second in the whole competition – a fantastic achievement for all involved.
Mr Bob Morriss, Executive Manager - Customer Services retired from the company on 2 July 2009. Bob had more than 44 years of service with AMI and its predecessor SIMU. He occupied a number of managerial roles and oversaw the establishment of our Call Centre operations in 1994. Since 1997 Bob has been responsible for our two call centre operations located in Auckland and Christchurch.
Mr Ross Collett, Executive Manager - Customer Relations completes his 36 year career with AMI on 31 October, 2009. Ross has held a variety of positions within AMI, most recently having management responsibility for our branch network operations.
Both Bob and Ross have served AMI with distinction and been committed advocates of the company and our Customer Care strategy. We thank them for the contribution they have made during their long careers and wish them well for the future.
Mr Kieran Sweetman joined AMI as Executive Manager - Finance in April 2009. Kieran has extensive experience in chartered accounting and has held a number of very senior Chief Financial Officer roles for both New Zealand and international companies.
FUTURE SMILES
As noted on the inside cover of our ‘Smile Report’ we measure our success by the smiles we see on people’s faces. For many it has been a year of uncertainty, both in a financial and personal sense. Our customers have again been exposed to the vagaries of the weather, the cost of which, along with reducing investment returns, has impacted on AMI’s financial results.
AMI has, however, retained a strong financial position and the commitment of our staff to our Customer Care strategy has ensured we have been there to bring a smile to the faces of our customers.
We remain committed to having the opportunity to generate even more smiles through our branch network, our two 24/7 call centres, our internet site, ami.co.nz, CLIC Car Insurance and our 24 hour emergency helpline, AMI Assist®.
Through our commitment to care, assist and deliver we will ensure our customers have good reason to keep on smiling into the future.
Thank you for your support and keep on smiling.
John Balmforth
Chief Executive Officer