Failed insurer's fuzzy figures

Liquidators of Western Pacific say it is not known how much the failed insurance company will get from its reinsurers.

The Queenstown-based company's directors appointed liquidators last week, saying it couldn't meet all its claims from the Christchurch earthquake.

Liquidators Grant Thornton say the specialist business insurer has assets of about $4.7 million, including the minimum $500,000 security bond it is required to pay to the Public Trust. But it says it is unknown what the proceeds from its reinsurance cover will be.

It's also unclear how much it will get back from $2.6 million worth of premiums held by brokers, and what it will be able to realise from $1 million worth of fixed assets and investments.

Meanwhile, it has unsecured creditors and unsettled claims worth $5.8 million, an amount that is expected to increase as more claims from the earthquake come through.

Western Pacific, with 7000 New Zealand policyholders plus interests around the Asia Pacific, announced it had stopped writing business two weeks ago. It had been known as a provider of cheap cover.

Its low "B" credit rating meant some brokers would not sell its policies.

David Archer, CEO of BrokerWeb Risk Services, said his company decided not to use Western Pacific because of the quality of its reinsurers.

Through acquisitions it had inherited clients with Western Pacific policies and had replaced those when they came up for renewal. Western Pacific's premiums were up to 60 per cent cheaper which was "ridiculous".

It had also inherited a couple of quake-affected Western Pacific clients and it had negotiated new cover for the companies at the lower price until renewal.

BrokerWeb had also decided it would pay those premiums on behalf of the clients "because I don't think they should have been there in the first place".

Steven Hills, of broking firm Willis, said two Western Pacific clients had come to it to find alternative cover.

However, getting insurance in Canterbury was now extremely difficult.

"Pre-earthquake we could have probably done a deal in an hour. Now we take three days."