Financial Times

Insurance impact still unclear
The extent to which companies whose businesses suffered in the disaster could recover their losses from insurance is still not clear with some underwriters apparently willing to honour claims and others saying natural disasters such as tsunamis cannot be insured against.

Experts said the impact on insurance companies would not be big since insurance penetration in the country is low and most of those affected would not have been insured.

However, they expect a flood of claims covering personal insurance, and damage to property, machinery and motor vehicles, especially from established businesses such as hotels.

Those who have obtained earthquake cover will be able to claim their insurance but the fate of those who do not have earthquake cover is still uncertain as insurance companies are still deciding on what should be done, said Nimal Perera, president of rhe Insurance Association of Sri Lanka.

Most companies only reopened their offices on Wednesday and some companies in London, where most of the re-insurance is done, worked only half day on Friday. Therefore, decisions on insurance claims will only be known next week, Perera said.

Most insurers in Sri Lanka do not cover natural disasters like tidal waves or earthquakes especially since the country was not known to be prone to such disasters.

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