Insurers face P11 billion claims

Published by rudy Date posted on October 10, 2009

MANILA, Philippines – The Philippine Insurers and Reinsurers Association (PIRA) revealed yesterday that initial claims for losses related to tropical storm “Ondoy” have reached P11 billion.

Claims for damage to property amounted to about P10 billion while claims for automobile damage could reach P1 billion.

Damage to agricultural crops is estimated at P6 billion, but PIRA did not say if there have been insurance claims for damaged crops.

“Bear in mind that a lot of factories and warehouses are located in Marikina, Pasig and Cainta. These factories have millions of pesos worth of machineries while the warehouses are full of stocks for the Christmas season,” Michael Rellosa, PIRA vice chairman, said during a press briefing yesterday.

Ondoy hit the country last Sept. 26 and brought heavy rains that caused massive flooding in Metro Manila and nearby provinces, killing more than 300 people and affecting over three million residents.

Insurance firms said hundreds of cars were submerged in flooded communities, while big factories were also damaged by floodwaters.

PIRA admitted that the amount of claims would increase if claims for damages attributed to typhoon “Pepeng” are added.

“It is one of the largest pay-outs in recent history for the country’s non-life insurance industry,” said Pedro Benedicto Jr., vice chairman of the PIRA’s ad hoc committee for post calamity response. He is also the president of Republic Surety Inc.

The committee is composed of representatives from the non-life insurance companies and the Insurance Commission (IC), which will respond to the recent disasters brought about by typhoons Ondoy and Pepeng.

The two biggest non-life insurance payouts in recent history were recorded after the 1990 earthquake and the 1991 Mt. Pinatubo eruption.

PIRA members said that they were capable of dealing with the claims using their own funds. Insurance companies also get insurance from reinsurance companies as a precaution to bigger claims beyond company reserves.

“We (PIRA members) have a combined net worth of P57 billion at the start of the year,” Rellosa said during a press briefing yesterday.

Incidentally, net worth is the value of the reserve after deducting the insurer’s assets against its liabilities.

PIRA is the trade organization of the country’s 86-member non-life insurance industry.

Non-life insurers cover damage (or loss) to automobile, property, marine, as well as personal accident.

However, the mix of types of coverage differs among companies. –Ted Torres (The Philippine Star)

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