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Insurance
firms go beyond policy Although many of the victims did not have insurance, given its low penetration rate in the country, companies anticipate more business in future as it will become easier to sell policies with people's attitudes changing in the wake of the tsunami, prompting them to take cover for all possible disasters. "We have the total support and commitment of our re-insurers and the earthquake claims settlement has started," Eagle Insurance CEO Deepal Sooriyaarachchi said. Life insurance claims for Eagle will be Rs. 80- 100 million and non-life (vehicles and property) will come to Rs. 3 billion. "There are about 150 clients with claims amounting to Rs. 150 million," Eagle’s non-life unit chief Upul Wijesinghe said. Although damages caused by the tsunami are not covered under motor insurance policies and was not available for clients to obtain, Eagle Insurance has decided to pay 100 percent of motor insurance claims to customers who have been with the company for more than 10 years and 50 percent for those who have been with it for more than three years. If flood cover had been obtained, the total claim would be honoured by Eagle, officials said. A company statement said policy holders who have lost their documents would be issued new ones. Union Assurance Ltd. (UAL) has received more than 150 admissible claims amounting to about Rs. 1.5 billion. "Most of it is non-life claims and we expect the total payout to exceed Rs. 2 billion," CEO Marina Tharmaratnam said. She said vehicle claims where customers had obtained flood cover would be honoured and the company is reviewing all available options to settle other motor claims. "Life insurance claims arising from the tsunami are considered accidental and policyholders with accident cover are entitled to double or treble the life cover," she said. UAL also said those who had its Union Shop and Union Niwasa policies which come with an in-built earthquake cover would be paid the full amount. A company statement said it would settle claims from several other lines of general insurance business including workmen's compensation, personal accident, marine cargo and boats. The Insurance Board of Sri Lanka (IBSL) has told insurers to pay out all flood covers. Motor insurance accounts for 46 percent of the total non-life premiums written. One in 500 vehicles have flood cover, but none cover tsunamis. The number of non-life policies sold in 2003 is estimated to have been around 1.6 million. Buddhika Piyasena, Assistant Vice President, Fitch Ratings Lanka said it will take nearly two weeks to assess the full damage suffered. Analysts said some firms would extend ex-gratia payments to property and casualty claims as this would greatly boost their marketing efforts. Larger claims pertaining to property have come from tourist resorts. "Flood damage and earthquakes are counted on to basic fire policy," Mr. Piyasena said. He also said that the net exposure on property and casualty of insurance firms will not be high but the exposure on motor insurance would affect their profitability. At the same time, analysts said people will perceive insurance in a different light since many firms have begun paying and taking insurance will catch on with people taking cover for all possible disasters. "It will be easier to sell insurance," said Namal Kamalgoda, Chief Investment Officer, Eagle NDB Fund Management Company Ltd. |
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