Being located on the boundary of two of the world’s largest tectonic plates, New Zealand can see disaster strike at any time. After successive Canterbury earthquakes resulting in huge losses, the Earthquake Commission (EQC) was challenged to create a new disaster recovery model to help New Zealanders get back on their feet faster, with less stress. Through a new operating model powered by Microsoft Azure and modern workplace tools, it’s now a leaner, much more efficient operation with a strong and resilient network of insurance partners. Together, they’re making Aotearoa a much more resilient place too.
22 February 2011 marked one of Canterbury’s – and New Zealand’s – darkest days, where a 6.3 magnitude quake devastated homes, architectural heritage and communities.
For New Zealand Crown entity the Earthquake Commission (EQC), this day also triggered a series of seismic shifts. As the “first loss” insurer for New Zealand, EQC covers properties against natural disasters up to the value of $150,000, with the rest covered by private insurers. Before 2011, the team of 20 was used to processing up to 4,000 insurance claims a year. But the Canterbury earthquake sequence unleashed demand many orders of magnitude higher – 450,000 claims and $10 billion worth of damage.
“We went from around 20 staff to having close to 1600 in just over a year to deal with the volume of claims,” says Jaron Shaw, Chief Data Officer at EQC.
While this was a necessary response under the circumstances, it wasn’t particularly efficient.
EQC were stretching themselves thin to manage the claims journey themselves, with verification alone being an extremely manual process, going back and forth in between customers, councils, property valuers and insurers.
This led to errors, duplication, confusion, and lengthy claim processing timeframes (causing distress and uncertainty for property owners), resulting in a suboptimal customer experience.
“It was well-intentioned, but disconnected programmes, policies and systems meant the organisation and customers were paying the price for siloed operations. We didn’t have a cohesive, strategic focus,” says Jaron.
Following another major earthquake in Kaikoura in 2016, which generated another 40,000 claims, EQC was determined to do better by putting the customer at the heart of its processes. This led to a high level of collaboration between EQC and private insurers to get the process right for customers. This was a turning point for EQC and led to significant improvements. Following Kaikoura, EQC knew it had to transform and embrace digital technologies to deliver more in partnership with the insurance industry to help New Zealanders recover from disasters. EQC worked proactively through this period, launching its own review taking into account lessons learned through the Canterbury and Kaikoura Earthquakes.
Supporting disaster recovery through digital and data
Success for EQC meant a centralised and coherent strategy whereby teams were integrated, with efficient and unified processes. To do that, data and technology needed to be at the forefront. To achieve this, EQC enlisted the support of partners, working alongside PwC, Datacom, and The Instillery over an 18-month period.
“We realised we couldn’t do everything ourselves – our strategy had to be relying on expert partners,” says Jaron.
So EQC conceived a new operating model in partnership with eight private insurance companies and the Insurance Council of New Zealand. The world-first model would remove the burden of managing part of the claims process and transfer the entire end to end claims journey to the customer’s insurer, with EQC supporting behind the scenes to coordinate, facilitate, and provide assurance for EQCover claims. However, to do that required the ability to collate and share data consistently and securely with eight major insurers.
This involved a bold strategy to bring EQC’s operations into Microsoft Azure and designing a new operating system leveraging modern workplace tools. The many disconnected legacy apps and systems were replaced with a data hub built on Azure cloud, which would allow EQC to scale up and down fast following any future disasters. It also ensured EQC’s systems could grow along with New Zealand’s population, without needing to invest in new infrastructure. Azure was also chosen for its market-leading security features, to ensure all insurance and personal data were kept completely secure and private, in line with government regulations.
In parallel, EQC implemented a range of online collaboration tools – something particularly vital in the event of any natural disaster. Microsoft Teams and Microsoft 365 – including Exchange Online and Sharepoint – were introduced to enable both flexible working and organisational resilience, meaning any of EQC’s team members could log in, work and connect with each other from wherever they were in the country. Surface Pros were also deployed to each staff member, providing the ultimate in flexibility.
“Natural disasters can strike at any time, we need our people to be responsive and able to work remotely from anywhere and having the right tools available to do this is a must,” says Jaron.
EQC also implemented Synapse, a new Microsoft tool for advanced analytics, which simplifies the process for validating claims and invoices. With insurers providing consistent, standardised data to EQC, an automated solution would help EQC validate claims quickly and accurately. Finally, Power BI was introduced to enable easy performance reporting on claims and finances, aimed at giving EQC complete visibility of claims within the system and much better transparency as a crown entity.
A world-first disaster recovery model
With the tech transformation complete, and all insurance partners now operating as one seamless whole under the Natural Disaster Response Model, New Zealand has a world-first disaster recovery model that could see other countries across the globe follow suit.
The new operating model now sees insurers managing claims on EQC’s behalf in a standardised and transparent way. Using Microsoft’s Power BI with data hosted and stored in the Microsoft Azure cloud, insurers share claims data with EQC, which is verified with EQC’s Synapse tool.
The importance of the new resilient model was recognised at the 2021 Microsoft New Zealand Partner Awards, one of the local tech industry’s most hotly-contested events, where lead delivery partner PwC New Zealand took out the Data and AI Award.
Rob Fisher, PwC Lead Partner Technology Consulting, is delighted with the result and says it’s a great acknowledgment of the work done by PwC and EQC’s commitment to a customer-led digital transformation.
“EQC was challenged to establish a new response model in partnership with the insurance industry and deserve praise for the way they leant into the scale and complexity of the programme. The result is a bold and innovative natural disaster claims model that has New Zealand citizens at the fore,” he says.
Nevena Pejanovic, PwC Data Transformation lead, says that as a Gold Alliance Partner, PwC collaborated with Microsoft Account Executive, Fast Track delivery and Product Development teams to achieve the transformation outcomes sought by EQC, through the use and integration of Azure Synapse services.
“I’m thrilled that PwC had the opportunity to partner with EQC to deliver an unprecedented rate of change leveraging Microsoft technologies. Our practice is committed to bringing the best of our Microsoft data capabilities to solve the big challenges facing Aotearoa. The result is one of the most responsive disaster response platforms in the world.”
Instead of having to grow its own workforce in the event of a natural disaster, EQC can now rely on its specialist partners Datacom and The Instillery to manage the technical side of things, while its insurance partners manage the end-to-end claims journey. Its own teams are much more agile and responsive, with flexible working made possible through the cloud platform and Surface devices. Meanwhile, instead of having to deal with multiple insurance providers to manage their claims, customers now have just one point of contact. It’s a win-win for everyone.
“When you live in a country prone to natural disasters, like New Zealand, life can be so unpredictable. What I love about the model EQC has created with its partners is that its impacts go so much further than optimising backend processes. It has the potential to save Kiwis years of trauma, stress and uncertainty and help whole communities regenerate and rebuild, plan and move on. The new strategic operating model is the ultimate example of how to use technology for good,” says Matt Bostwick, Partner Director at Microsoft New Zealand.
The fence at the top of the cliff
But EQC is just getting started. It now has the opportunity to improve resilience throughout the entire country through better use of data and modelling to reduce damage, and help New Zealanders mitigate risk.
“We have huge ambitions in the resilience space and there are a number of ways we can do this,” Jaron says.
One of these ways is analysing claims data to recognise which materials or features of a building are most susceptible to earthquakes and other natural disasters. EQC is now on a mission to put more insights in the hands of all New Zealanders to help educate them on improvements they can make to their homes to limit damage resulting from natural disasters. More detailed information on flood risks and other hazards (which would also help councils manage resource consents) is also on the cards. Instead of being the ambulance at the bottom of the cliff, EQC has now started building a fence at the top.
“EQC ultimately want New Zealanders to make good and informed decisions about their homes. Having the cloud tools to be able to map out these trends means we’ll be able to influence change. That’s a great step forward to a more resilient future,” says Jaron.