Between them, the churches in the Catholic Diocese of Dunedin face a $240,000 insurance premium bill this year.

It's a lot of money.

During the past 10 years the diocese has had just one significant claim as a result of arson that damaged the Invercargill Central Presbytery.

"Over the last 30 years there have been very few claims" says Dunedin diocesan operations manager Paul Olsen.

Rather than continue to pay hundreds of thousands, the diocese (which encompasses Otago and Southland) has decided to move to self-insurance for its 50 churches.

As is legally required, the diocese's Catholic schools will still be covered with policies from insurance companies.

Consultation and agreement

Olsen says the DIY decision was made after diocesan-wide consultation.

All parishes agreed to the self-insurance plan, he says.

"We have a huge portfolio.

"It is good for people to know how they may handle a disaster because it may be that not all of the portfolio would necessarily need to be rebuilt like for like.

"We anticipate this will be implemented in this next insurance round for 2024."

How the scheme will work

The DIY insurance scheme intends establishing a $1 million fund to cover the diocese's churches in Otago and Southland.

Parishes will contribute to the fund each year instead of paying insurance premiums. For audit purposes, the money will be held in trust under the parish's name.

Essentially they will be building a pool of money to place on stand-by in the event of a disaster damaging parish assets.

This will ensure the diocese can continue its church mission, conduct services and house its clergy in the event of a disaster. But it won't ensure like-for-like building replacement.

Olsen thinks it will take about five years to build the fund to $1 million.

In the meantime, the diocese would support parishes to respond to events falling within those five years, he says.

The Dunedin diocese will be sharing the full plan and details with parishioners in the coming weeks.

Insurance vs Church mission

Dunedin diocese priest Father Gerard Aynsley is clear about the reason the churches are abandoning their insurance premiums.

"We can't actually afford it. When people give money to the church, they're really wanting the church to be doing its work, not to be paying insurance" he says.

Source

• ODT
• Insurance Business

Catholic Church Insurance chairman Joan Fitzpatrick has written to policyholders proposing a scheme of arrangement, which is a common procedure in global insurance markets amid uncertain future claims.

Ms Fitzpatrick said that it was possible that further claims could emerge that could endanger CCI's solvency, "resulting in significant impacts on policyholders''.

A scheme of arrangement, she said, would seek to ensure that a formal insolvency process was avoided.

"Based on estimates of claims as at end of May 2023, CCI currently has sufficient assets to meet its liabilities as they fall due,'' Ms Fitzpatrick writes.

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