Southern Response expects to cut at least 15 roles by June 2025 as the Government insurer works out its future

Southern Response is anticipating staff numbers at the government-owned insurer will fall from 24 roles to just eight or nine in the next 12 months.

Southern Response had its annual review before Parliament's Finance and Expenditure Committee on Tuesday where its top brass revealed it's expecting “significant downsizing” by the end of its June 2025 financial year.

Alister James, Southern Response’s Chairman, described the insurance agency as having “a limited purpose and a limited duration”.

AMI ran out of reinsurance and couldn’t pay out on claims following the 2010 and 2011 earthquakes in Canterbury. The Government then set up Southern Response to settle Canterbury earthquake damage claims occurring before April 2012 from AMI Insurance policyholders.

James said Southern Response had continued to deliver the Crown package that was established in relation to a class of customers who cash settled prior to October 2014. That grant package is expected to be wound up by the end of June 2025.

“So far we have settled 9,019 claims. That represents about 96% of eligible applicants. So we're coming near the end of administering that package,” James said.

Southern Response is continuing to settle outstanding covered claims in partnership with the Natural Hazards Commission (NHC) ,which James said would hopefully bring “some conclusion” to the settlement of Canterbury claims.

“In terms of our duration, we continue but on a basis of diminishing in size and we'll see significant downsizing in the coming year,” he told the committee.

Southern Response expects the number of employees is likely to fall from 24 to 8eight or nine remaining employees.

Nine employees at Southern Response were made redundant during the 2024 financial year.

James also noted that Southern Response was reliant on Crown indemnities, and could only keep going “as long as the Crown gives us indemnities”.

Claims predicted to still be coming in the door in 2029

Chief Executive Casey Hurren told the select committee the agency’s actuaries are predicting claims will still be coming in the door by 2029, meaning claims post June 2025 are expected.

“So it's not saying that yes, everything will stop in terms of liabilities. What we're working towards is when's a sensible point in time where it doesn't make any sense for our operations to continue to exist,” Hurren said.

“And that's what we've been asking not only ourselves, but I guess the Crown as well is acknowledging that there are these liabilities still coming in the door.”

New claims in 2029 would be 18 years after the February 2011 Christchurch earthquake.

David Seymour, who is the Minister Responsible for Southern Response and the Natural Hazards Commission (NHC), wrote to James in May earlier this year, saying there would be “enhanced scrutiny” of any Crown funding as well as a focus on the return of surplus capital to the Crown.

“Your board should be prepared to demonstrate how Southern Responses’ spending is as efficient, effective, and responsive as possible to increase the prosperity of all New Zealanders,” Seymour said.

The government agency has battled controversy over the years, with Southern Response found to have been carrying out investigations into clients and lawyers back in 2018. 

The High Court also ruled in 2019 that Southern Response had engaged in misleading and deceptive conduct, and contractual misrepresentation around insurance payouts.