Asymmetric information, EQC edition
26/03/2013 § 7 Comments
It turns out that EQC knows exactly what it’s doing. It knows exactly what damage has been done to our properties, what the engineers’ assessments are, and a whole lot more. And all the data is available in a handy spreadsheet. You and I just don’t get to see it.
Information is power. In this case, power over people’s house and lives.
- This is the problem with the public agency insurance model. Is it an insurance company? Is it a government department? It’s neither and both. They are screwing down the claims as much as they can, like a private company, but they get to set their own rules, like a government department. And us, the consumers/citizens? High and dry, baby.
- One of the clients of the man who incorrectly received the spreadsheet, Bryan Staples, was paid only $30,000 when EQC knew there was $55,000 to $59,000 of damage. How is a homeowner, a non-expert in building matters, supposed to know how much damage has been done and what it’s worth? EQC is using its expert information, rather than dealing with claimants in an honest and open manner. Last year, another state-owned insurer, ACC, had bonuses for cutting people off. That is, bureaucrats were paid to screw down claims. Is this happening in Christchurch?
- I’m not so concerned about fraud — I think Eric Crampton’s right about that. I’m more angry that EQC has produced a handy guide that only insiders get to see. An enterprising individual could go around the city with inside knowledge of houses and assessments and figure out which houses are underpriced and overpriced. Or, some variation on the ‘nice little house, shame about the earthquake damage’ could push prices down artificially.
The story isn’t about someone accidentally sending the wrong email. The story is the spreadsheet and the secrecy. And the damage being done to the people of Christchurch.