Premiums to rise as break-ins fall

By SCOTT INGLIS

Householders and business owners are likely to face higher insurance premiums, even though reported burglaries have plummeted to an 18-year low.

There were 66,525 home and commercial burglaries last year - 10.7 per cent fewer than 1999. House burglaries alone fell 13.9 per cent to 41,003.

Police Minister George Hawkins credited a Government crackdown on burglaries, launched last June, and good police work.

Consumers Institute chief executive David Russell said he would expect lower premiums, but premiums are instead predicted to rise over the next three years.

Insurance Council chief executive Chris Ryan said he did not know how much the increases might be.

The average annual premium for $30,000 of household contents cover for a 30 to 40-year-old is $400 to $450, according to one broker.

Mr Ryan said that although fewer burglaries meant fewer claims, the cost of claims had risen because people owned more property now.

In 1999, insurance firms paid out $260 million on contents claims - about $30 million more than in 1995.

The other contributing factor is that New Zealand insurance companies - nearly all of which are owned by overseas giants - are at the mercy of international events.

Firms insure themselves with companies called re-insurers, which cover the cost of big disasters such as earthquakes and floods.

Re-insurers pay out thousands of billions of dollars and are forced to pass on costs to insurance companies - including those in New Zealand.

Mr Ryan said tragedies such as the Turkish earthquake two years ago and the Sydney hailstorms, combined with flattening US and European economies, would put pressure on premiums here.

In announcing the provisional burglary figures for last year in Auckland yesterday, Mr Hawkins vowed that the hard line against break-ins would continue.

The fall in offending followed a 5.5 per cent drop in 1999 and 2.7 per cent in 1998.

The best performer nationwide last year was the North Shore-Waitakere police district, with 3914 burglaries, a 26.14 per cent drop.