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Opinion: Why the government had to bail out AMI and why it must now toughen the regulatory regime for insurers and insurance brokers

Opinion: Why the government had to bail out AMI and why it must now toughen the regulatory regime for insurers and insurance brokers

By Bernard Hickey

There's an old saying that when the tide goes you discover who was swimming naked.

In the space of 8 months we've now discovered two large Canterbury financial institutions were swimming naked.

Unfortunately, they were so large and so naked the government has had to run up to them with towels made with over NZ$2 billion of taxpayer money to preserve their modesty and the confidence of New Zealanders in their financial system.

South Canterbury Finance and AMI Insurance shared many things, besides the fact they were deemed 'Too Big To Fail'.

They both were founded and grew quickly within Canterbury's apparently conservative and cosy business community. Despite that cloak of conservatism, both ran relatively risky growth strategies.

Both were sceptical of the media. Allan Hubbard at South Canterbury Finance was renowned for not bothering or wanting to talk to the serious financial media. AMI's John Balmforth simply refused to talk to us 3 weeks ago when we wanted to find out what AMI's capital position was. It was only after we directly contacted board members did we get some answers, and then they were vague at best.

The surprisingly out-of-touch and remote responses we got from the directors betrayed an organisation that seemed not to have a disaster plan or any strategy for dealing with questions about its financial stability.

Both AMI and South Canterbury appeared not to have planned for disaster. They both did not charge enough for their products. They both relied on shareholder structures dominated by management. They both failed to put aside enough for a rainy day. They both shared an old fashioned approach to corporate governance and public accountability.

They both shared a distrust for the capital markets and a reluctance to face rigorous and sceptical analysis from either those capital markets or outside players.

But most of all they were allowed to grow very fast with unstable capital roots by regulatory regimes that either did not exist or were dominated by a 'laissez faire' and 'light touch'  approach that was naive at best and disastrous at worst.

Under capitalised and under reinsured

Firstly, let's look at the events leading up to the government's unprecedented and extraordinary decision this week to step in and put its financial heft behind AMI.

The February 22 earthquake was also extraordinary and unprecedented, but it was forecastable.

Insurers spend an awful lot of time modeling events such as earthquakes. They take out reinsurance on the basis of the risk of a 1 in 250 year event or a 1 in 500 year event or a 1 in 1000 year event. They calculate potential losses in such an event and take out insurance for that.

The more catastrophic and remote the event that is covered, the more expensive the reinsurance.

The Sunday Star Times calculated here AMI invested 3.7% of premium income in reinsurance. Other insurers exceeded 10%, with Lumley General reporting 16.3%.

AMI was renowned in the industry for offering the cheapest prices for general insurance and many grumbled/wondered if it had put aside enough capital for a rainy day.

Like many other insurers in New Zealand, it calculated it reinsurance by working out the potential losses from a 1 in 800 year event in Wellington.

But AMI's much higher market share in Christchurch exposed it to much larger losses if that event was in Christchurch rather than Wellington.

There was no regulator there to tell AMI to put aside more capital and take out more reinsurance for a Christchurch event.

We need to be tougher than the Australians

The Reserve Bank is taking over regulation of the insurance industry during the middle of this mess. It was scheduled to announce new solvency requirements tomorrow.

Before the Reserve Bank's elevation to prudential regulator for insurance, the industry was essentially self regulating.

An insurer only had to be a member of the Insurance Council and have capital worth 20% of its annual premiums.

The only saving grace is that most of the industry (State and NZI are owned by IAG, Suncorp Metway owns Vero and 68% of AA Insurance, and Lumley is owned by Wesfarmers) is owned by Australian parents, who are regulated hard by the Australian Prudential Regulation Authority (APRA).

The exceptions are Farmers Mutual Group (FMG), which is thought to be well run, and AMI.

But the Australian rules may not be tough enough, given the solvency requirements don't take into account the risk of massive earthquakes and volcanic eruptions. Australia only has to deal with bushfire, floods, storms and the occasional smallish earthquake.

The Reserve Bank will no doubt be reevaluating its solvency requirements in the wake of AMI's failure.

Let's hope we learn from this and ensure our swimmers are well covered up.

There was no choice

Meanwhile those questioning the decision to bail out AMI Insurance need only look at the consequences of no bailout. There would have been chaos inside the industry and no doubt a massive bout of confusion and delay in Christchurch.

The government will no doubt hope a white knight comes along.

They may not be so lucky.

Many of AMI's policies are on monthly contracts and can be canceled easily. State, NZI, Vero and AA will no doubt aim to win AMI's market share naturally, rather than have to take on the risk of a set of assets and liabilities that are racked with uncertainty.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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42 Comments

When Wellington gets trashed like ChCh I dont want my insurance saying "'don;t worry,  when EQC say your property is stuffed, then we will rebuild your property in your stuffed suburb of your stuffed and jobless city - even if it takes us 5 years!

Like many in ChCh, I would like to move on and I would want a ( near immediate ) cash payout  to the equivalent of my properties pre-stuffing value. ( Land and improvements ).

Where do I get such Insurance ? What is it called ?

Bernard,

Did it not seem strange to anyone that folks were still waiting to be paid out after the initial quake last September?

The whole smug culture of Canterbury is just a purer version of the same hubris evident throughout the country.  It is a dream sequence so divorced from reality I stammer whenever somebody tells me how well things are here in New Zealand.  The self-interest is layered so thick I'm not sure very many people will notice it when the finances of the country encounter the systemic failure heading our way.

The quake sequence itself is a perfect metaphor:  The September quake is what happened in 2008 -- The December quake is on the horizon.

 

The NZpublic and NZmedia ?

Here is one of a few essential solutions to the severe ongoing problems affecting our society – the media challenging politicians, authorities and companies for more transparency, openness and engagement to communicate with the NZpublic.

 We are in a critical time not only influenced by natural disasters, but worldwide massive financial, economic, political, environmental and social problems. To overcome accumulating and accelerating problems in our society some radical, practical steps need to be undertaken.

 1) Because we are a nation of TV- watchers, crime programs on our national TVchannels need to be reduced and replaced by weekly valuable information/ debate/ discussion/ education 1-2 hours programs about the stage of the nation – urgently.   

 Bernard - you and your team could be on the forefront to organise/ initiate such changes.

You are right, but I am afraid it won't happen. Our media are not reporters but entertainers and I don't see any chance of that changing soon. It is quite clear, and unfortunately it is human behaviour, that we will walk head long into calamity. You must have noticed that your friends and family don't want to hear your conerns about where we are heading?

WE must scrafie otherwise:

Minister J. Coleman are you dumbing down the nation ?

http://www.stuff.co.nz/dominion-post/news/politics/4856878/TVNZ-7-to-get...

New Zealand is on a tipping point - the collapse of our economy and as a consequence unrest not far away.

Hi,

Not only that but they grin at me like Im deranged....

regards

Firstly thanks Bernard for digging into this some weeks ago.  AMI was always one of the cheapest in the market

It does put the spotlight on mutuals again.Becauase they dont have shareholders to be accountable to they tend to do their own thing often with a strong CEO that runs rings around the board who usualy consist of policyholders who dont understand the risks and with little insurance experience.

As a taxpayer this is the last staw, it was bad enough with SCF and now they tell us that that bailout cost is rising

. What grates on me is that SCF is still lending,the lending is still being done by the same staff that did the poor lending in the first place.They havent changed their bad habits.

Why dosent the government freeze all new lending at least we could try and stop the rot.

 

Who will next

 

Harry, Sorry but I dont agree with your point of view its quite frankly looking farcical.....

NB Personally I think the short termism of shareholders and many CEOs is now doing more to damage a typical company than anything else....

Mutuals again? what was he last one?  do tell, compared with all the private finance companies that have gone bust? since you wish to mingle in SCF to an AMI thread.

Also mutuals have no profit to make to shareholders, hence its not that un-reasonable to assume policys could be a little cheaper than some.

"Policyholders who dont understand the risks" thats comical if you believe that....

So what you are saying is board members of AMI shouldnt be in the ICNZ either....

http://www.icnz.org.nz/news/review/08-09/council.php

AMI is well represented on there.....

I had a quick rout around for AMI boards members, the ones I could see seemed very well qualified for their roles....

regards

"Also mutuals have no profit to make to shareholders, hence its not that un-reasonable to assume policys could be a little cheaper than some."

That doesn't make sense to me. The other insurers have to charge more because of their obligation to return something to the shareholders.  But shareholders only get something out because they put something in - namely capital, the buffer used to cover the occasional big claims like this. With no shareholders and no capital, a mutual has to build up that buffer from somewhere else - which takes us back to the issue of the premiums they charge.

uh....

I would think its quite simple......

Premium will be there to

a) cover annum claims....I think someone said thats 57% of the annual premiums.

b) Operating costs, staff wages, rent

c) Re-insurance for events beyond the capacity to meet from reserves(captial, cash)

They both also will have income off their assets.

For a private company it then has to offer a shareholder return, that would be not less than 5% and maybe 10% maybe more.

Anything else, yes is money put away to grow reserves.

My understanding is there is a leverage ratio....so if you have (say) 500milion in capital you can under-write / insure (say) 5billion in value....this applies to a private company or a mutual....

So that payment to shareholders doesnt exist in a mutual, it can either charge lower premiums or grow its reserves quicker...AMI has been

regards

 

 

 

 

No, that still doesn't make sense.  The payment to shareholders doesn't exist because the capital buffer provided by shareholders doesn't exist.  Charging lower premiums is only an option if you intend to run with a smaller buffer than the other insurers.

Think about the banks - TSB is a mutual.  Do you see them undercutting the other shareholder-owned banks?  Don't you think that would be a big selling point for them, if that business model were valid?

Actually, here's better question: if being mutually owned allowed insurers to undercut shareholder-owned competitors, then why would any of them NOT do it?

i have 3 immediate family members living in chch so i have become a avid reader of the chch press and i have to say the news/progress is abysmal---this latest article is just stupidty---insurance money being spent in this way is plain wrong---wtf is the council  up to-- trying to profit from misery ?---danial tobin from the press did a fly over the cbd a couple of day,s ago and i wondered why there was no clean up activity going on---this goe,s along  way to explaining why.

http://www.stuff.co.nz/the-press/news/christchurch-earthquake-2011/4856803/Rubble-fees-delay-reopening-of-retail-centre

 

Jesus that is crazy. If they keep having to pay $90 per tonne then that is almost $400 million.

How much did they buy NZ rail for? You could run a line right to the problem areas, if there isn't already, and rail the stuff out to somewhere that could use it as fill.

Why are they not using it as a foundation for any new building proposed, as was done with some of the great classical buildings. The Parthenon has at least two predecessors underneath it, not only that but the whole acropolis is built on earlier foundations.

A serious absence of lateral thinking. As my post above I don't hold out much hope for this country, well in the near term anyway.

There was no option, but to bail out AMI.  But can the Government afford to bailout Christchurch?

The extent of destruction here is so great.  There is a real question as to whether NZ can endure not only the lost revenue, but the huge new jobless bill, the depopulation, let alone the infrastructure rebuilding and the EQC's and AMI's liabilities.  Much of the damage is still kept under wraps within cordons that could've been shifted back 4 weeks ago.

Little progress has been made in 7 months since Sept.  Much less in the 6+ weeks since Feb 22.

When the dust settles what will the costs to the country be?  Will there be any confidence for a recovery to occur?

If the costs prove too high and the confidence too low, where will NZ be?

Tax revenue loss as well.....I dont think Chch will ever recover....it might now even decline....lets face it, ppl stay where they are usually unless there is a huge reason to move, once moved, why come back? The brightest can move the easiest and Im sure they have and will....its also no biggee to fly the bit extra to oz as opposed to Auckland....

regards

"It's only when the tide goes out that you learn who's been swimming naked."

 

Not that old, actually - attributed to Warren Buffet

 

The FT added "You also find out who has been wearing diamond-studded flippers."

 

Property prices and sales are up in Auckland, so all's well.

Nothing is as obvious as it looks now...

The reality of AMI is that it was/is a company that has been around a while, with a reputaiton for paying claims and a good business model (when it came to delivery and having local branches where you can still talk to people instead of just a call centre). They were price competitive, in a market where buyers will move over a few dollars - but not really that different from any other insurer.

AMI are not in trouble because they were cut price merchants like some are making out. They have been hit by two major events - that probably no one else had predicted or prepared for either. They are not the first to underestimate the level of reinsurance protection they should have.

The problems included:

- size (or lack thereof) - AMI are small, NZ based and domestic insurance only,

- concentration of risk - too much in one place (though everyone still thinks that Wellington is the main problem not Christchurch). Perhaps we should be asking insurers what they now think the total losses would be if a new volcano opened up in Auckland and see what answers we get...

- regulation - what regulation - there is effectively nothing until 2013. We should all be very thankful that Australia has APRA, which has forced Australian insuers to regulate their operations in NZ the same way. The solvency margin mentioned is purely voluntary as a member of the Insurance Council.

- NZ tax laws - in other countries (where the reinsurers are) it is possible to create reserves for catastrophes - but not here. IRD thinks insurers are avoiding paying tax, so no insurer can create catastrophe reserves for these events (other than EQC)

- Model Reliance - decisions on catastrophe exposures and reinsurance are based on complicated models. These are highly detaile, but they are always wrong in practice, because nothing works out exactly as planned. Some may be from big overseas modelling companies (who model losses from hurricanes in the US ie Katrina etc - which they get wrong). Earthquake models in NZ often come from GNS. In the end an Insurer has to make a call based on as good advice as they can get. AMI will have used international professional advisors (they all are) and were probably within the parameters that most insurance companies would use...

- Capital  - AMI had a mutual structure, which meant no big deep pocketed parent. Its owners are the same people who are having claims. This has been an effective, if considered somewhat restrictive model. The problem is that there is no-one to fill the coffers at present.

- Sometimes really bad things happen that no one can predict - The black swans were out in force.  AMI are not a bunch of "fat cats" like some of those involved in finance company failures - there are no major shareholders, related party transactions or big option deals.  AMI may well have spent less on reinsurance than others partly because of what they insured. Cars don't require a lot of reinsurance, and the other insurers all cover commercial property. When nothing bad happens for a while people forget that it can.

Problem is white knights will be thin on the ground

Well said, Bernard seems grumpy that AMI would not talk to them a few weeks back when they had the lead on the media pack.The media forgets Board and management of non listed entities in troubled times have  a clear fiduciary responsibility to try to sort the position for their stakeholders rather being open to the media.

Not so sure on no  white knights....it has a huge slice of the NZ market, and an established name especially on South Island that should make it an attractive buy...if the losses are seperated out....

Also while its household insurance may now out of the Q it has a lot of car insurance business which it could cleave off as a seperate entity.....and should still be profitable going forward.

regards

The state owned media will not challenge its funder, and now that TV3 is running a tab for its broadcasting licence fees, there is little hope for a serious challenge from that wedge of the fifth estate.

It used to be that print journos did all the hard background and investigative work and embarassed their broadcast cousins into joining in.  These days few resources are committed to invesigative pieces that may take months of work.  Independent newspapers have been swallowed up by the Murdochs of the world and operate on a franchise business model.  Declining advertising revenues spell doom for the broadsheets.

The only hope for a free press rests in the hands of bloggers and on-line sources.

Chaos, confusion and delay is the reason we have to save a fraudulent insurer? I can imagine that as a reason to bail out the insured. Not to reward fraude.

There is no justifiable reason to believe at present that we have a "fraudulent insurer"  Can you show any evidence of theft? mal-practice? illegal behaviour?

What we have is a complex issue of unlikely, extreme events that are not or maybe only just covered for...

A year ago ChCh was considered a very low risk city for an earthquake...unlike Wellington for instance.....and instead we had 2 major earthquakes in a few months.

regards

NZ and ChCh were so low risk that AMI decided to sell disaster insurance that they couldn't possibly pay out on.

Perhaps internal discussions at insurance companies go something along the lines: "What could possibly go wrong?  If there's a disaster the Government will always bail out our customers, while in the meantime we can make huge profits and undercut our competitors...  Excellent work, I think some someone needs a bonus."??

All a bit like finance companies lending fourth mortgages at 9% on some vacant land in the bottom of a shaded gully 30 minutes from the local holiday spot, that the developer (aka the finance company director's mate) was intending to build a luxury lodge on.

Neither's ever going to turn out pretty.

Finance company directors who took shortcuts and failed to make adequate provisions don't generally get left in charge when the tide goes out, so why has AMI not been put in administration?  Sack the CEO, Board and senior management as of yesterday! - that's a saving straight away!

The administrator's are going to need to come in at some stage anyway.

How much has thge huge increase in house values in the last decade affected the industry. 

Would it be very different if values were around where they were in 2000? Has the property boom out run the insurance industry?

The insurance covers the cost of rebuilding, not the selling price.

The cost of building would have been unable to escalate to the degree it has if houses prices had been stable

If house prices been stable, building costs would have still increased, less houses would have been built, which would push house prices higher.

See, it all ends in inflation.

10 years ago a basic house cost about $300PA to insure now it's closer to $600PA, I don't think the insurers have done too badly.

Bernard from what i udnerstand is that AMI have acutally paid the Government $15 million to have them as a backstop if needed. So far they have not drawn down any of the backstop funds and wont if they find a WHITE KNIGHT insurer to get into bed with? ANd by the sounds of it there are a few hanging around, and they needed this backstop to give them a bit more time to stich a deal up? Correct?

So at the end of the day..the government may be $15 million better off if they can get a big player (Lumley, AMP or someone) to buy a chunk of them, which they will need  as it will otherwise be a step raod to climb without the backing of a major industry player.

 

Cheap insurance is a bit like cheap shoes. Very kiwi, but something you should just never do.

This country needs to configure its insurance industry (and the EQC) to have sufficient resources to fully fund two simultaneous major disasters, and strategies to replenish the shelves asap once those funds are called upon.  

NZ will always have earthquakes and it will always have volcanic eruptions in populated areas.  Deal with it.

Bernard,

"Meanwhile those questioning the decision to bail out AMI Insurance need only look at the consequences of no bailout. There would have been chaos inside the industry and no doubt a massive bout of confusion and delay in Christchurch"

That's why we always have bailouts....because we cannot bear the thought of chaos; we are not willing to suffer the consequences.

That chaos is what makes us stronger and enable us to do things differently the next time. Bailouts just prolong the behaviour and are actually very unhelpful in the long run.

Of course it's much easier to load up more debt instead of say "sorry you have to deal with it".

 

 

.

Bernard, you say - "The February 22 earthquake was also extraordinary and unprecedented, but it was forecastable"

Could you please let me know who could forecast such an event? My understanding was the faultline was not known to exsist. Any modelling/forecasting of such a catasrophe surely used the best available information at the time. How could AMI have been expected to model such an event on a faultline which was not known to exsist?

In simpler terms - How can an unprecedented event be forecastable. 

With all due respect to you straight_shooter, but are you serious? Christchurch sits only 159 km from the Alpine Fault, one of the world's major fault lines and the plate boundary between the Pacific and the Indo-Australian plates. This fault line has a history of generating megaquakes of 9.0 on the Richter scale. Anywhere around the major plate boundaries you will get fault lines radiating away from the boundary and Christchurch/ Canterbury is no exception to that.

There is not one square inch of the South Island that is safe from large damaging earthquakes with the possible exception of Dunedin which is 255km from the plate boundary, and the coastal parts of Otago and down into Soutland, but even then I wouldn't hold my breath. Given the known geological reality of New Zealand and its attendant risks casts a very negative spotlight on the quality and competency of AMI's risk assessment and its overall reinsurance model. It looks to me like they have got it wrong, but none of the other insurers have. In the fullness of time I hope some very hard questions will be asked of the company and heads will roll. I might be mistaken but isn’t the CEO a foreigner?

By the way Auckland is about 230 km from the plate boundary in case you were wondering; close enough in my view to still be at risk of suffering from earthquake damage if a truly big one hit the Bay of Plenty. Time to make sure our own buildings are up to the challange, eh?

David_B, as you say, Christchurch is 159kms away from the Alpine Fault. The risk to Christchurch from this is signifcantly different compared to a shallow magnitude 6 earthquake directly under the city (which caused peak ground acceration levels never seen in the world before). 

You say it looks like they have got it wrong - I would have to agree, however, in saying none of the other insurers have - is that more good luck?

I think the only reason more insurers aren't struggling with their reinsurance limits is that thier reinsurance would have been purchased on the basis of a major catasrophe in Sydney (Australian owned insurers anyway).  

Yes the ground peak acceleration in Christchurch was severe but according to a ref. in Wikipedia it’s not the strongest on record. Believe me if a magnitude 9 quake hit Arthur's Pass you'd see a lot of damage in Christchurch. That 8.9 quake that struck Japan a few weeks back was 8000 times bigger than Christchurch's recent quake and look how it shook Tokyo and Tokyo was 370 km from the epicentre!

But all of this is somewhat irrelevant. Christchurch is, was and always has been in an earthquake zone. The earthquakes of the last 6 months just reflect that. There was no secret or surprise here which is all the more reason why insurance companies must take a very conservative approach to their risk assessments wrt to earthquakes. It must be grounded in a firm and thorough understanding of what exactly it is they are dealing with and the implications.  More so when a company holds 30% of the market of a major metropolitan area that sits smack in the middle of an earthquake zone full of brick buildings built by Poms who had never experienced an earthquake in their life, and after having been on the ground for all of 10 minutes.

It seems to me that AMI have failed to fully appreciate and understand the nature of the risk they were dealing with in an ‘earthquake zone’. Or maybe they just didn’t get it? Or perhaps they tried to talk themselves out of fully appreciating that risk by using a whole lot of ifs, buts, yeah buts and maybes, so they could keep offering cheap premiums to their customers? Whatever they did they have just scored an epic fail.

Sadly once again the cost of all of this will be borne by the long suffering New Zealand taxpayer. Here we go again with another example of kiwi business losses, failings and incompetency being socialised to us all. It is well known that New Zealand management, senior management and corporate leadership is weak. They are to world business what the Black Caps are to cricket. And we are seeing example after example of that, costing billions of dollars and it’s time we did something about it. In fact it’s time the business community of this country actually fronted up and did something about it.

Your view? and you are a qualified specialist?

or an arm chair know all?

regards

Bernard, this morning's news in Sydney was all about the Australian insurance companies not paying out for flood damage. Appears that the defintion of flood water and storm water is meaning payouts are not being made. Followup action is also not managed by the Insurance companies. I think that all property insurance comapnies are going to experience a big hit and some of the Australian big ones are also going to need support like AMI.

Bernard the lesson is that tightly regulated insurance comapnies does not mean financially secure companies when multiple disasters hit.

 

There's only one way out of this debt mess in NZ.  Inflate. 

Shame we don't have the smarts to do it before the rest of the world though.  They'll be doing it pretty soon and it will catch us off guard and cost us even more.

Good try FYI but to inflate leaves open a gate...and through the gate we go to ruin by another path....it might look nice on paper to the indebted that they can wash away their debts..but the downside is the creditors demand a return that allows for the inflation...so you see all you gain is the short time span between the start of your inflation run and the point where credit has to be rolled over....and the creditors will not roll over FYI...they will say you pay or they bugger off.

So you have to pay...and the creditors turn the screw to get back what you gained by inflation over that short period....and here comes the poke in the eye FYI....the creditors now know your country is a shite when it comes to monetary policy...they brand you in the same craphouse as the likes of Greece...your once lower cost credit now costs an arm and a leg and half a torso...permanently....kapesh

 

http://www.stuff.co.nz/business/industries/4867262/Quakes-to-push-premiu...

The nasty part is,

"Households might find that the insurance premium for 100 per cent cover for earthquake damage is much more expensive, but 80 per cent cover might be affordable.

In San Francisco, 60 per cent cover for an earthquake was common and similarly in Japan cover has been reduced.

"You can get 100 per cent but it's so expensive that most people don't," Mr Ryan says.

So when you go to the bank for a 80% or more mortgage you will find the insurance costs to cover the bank that the bank will insist on will be way too much....that will dampen the market....

regards

FYI from a reader via email:

 

Sounds to me very familiar... Bail out!!, is like what it happen in the US in 2008, bailing out banks and insurer companies.

The system doesn't work and it will never work if there are greedy people taking the decisions.  You are saying the government is acting.... acting with our money, taxes and revenue, so is not the government in the country (Us) who is paying this bail out.

They want to keep confidence... in what ?? in insurance companies who do nt  stand up for us after we pay our annual fees?

We are smart people, and we need to make a difference... imagine if something like this happen in Auckland or Wellington.... which insurance company is able to pay for the damage at the moment?? can you tell us that?

Change the system!!! talk about that, talk about something new..... who are those shareholders??? they are enjoying life in their beautiful houses and the whole city is suffering to warm up their homes.

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