‘Negative impact of recent floods greater than that of Dec. 2004 tsunami’


By Hiran H.Senewiratne

"The negative impact of the recent flood is greater than that of the tsunami of December 2004,which ravaged parts of Sri Lanka, president, Insurance Association of Sri Lanka Dirk Pereira said.

The industry expects the value of the claims relating to the recent floods to surpass the initial estimate of Rs. 7 billion as the number of claims is expected to rise when people fully settle down in post flood times.

Finance Minister Ravi Karunanayake said post-flood reconstruction costs would be between Rs.150 and Rs.250 billion.

Pereira said companies have settled a high percentage of the claims and added that larger claims will need more time to settle as they needed to be assessed by overseas or local professional loss adjusters.

With regard to the large claims, he said there is no issue of settling claims as insurance companies are backed by reinsurance.

Deputy General Manager Ceylinco VIP Senaka Rajapaksa told The Island Financial Review that they have settled more than Rs 2.9 billion claims within 14 days for more than 2300 clients.

"This has prompted us to introduce two schemes for the clients covering flood relief coverages; that is, for house owners and traders in the country. These are now becoming very popular among our clients, Rajapaksa said.

He said their company is one of the few insurance companies that has settled all claims within 14 days, "which is a great achievement."

Further, Sri Lanka Insurance Deputy General Manager, General Insurance, Thanuja Higulage said that they received more than 1000 claims after the recent floods and 75 of them have been already settled within a short time span.

She said that their flood insurance cover has been available for quite some time but most of their clients had not purchased it as they never expected such a terrible calamity in Colombo. Further, the value of some properties has been underestimated by their clients.

She said that the total estimated claims ran into Rupees one billion but that amount came down slightly due to property estimation issues by their clients.

Chief Operating Officer Janashakthi General Insurance Ltd. Dayalanie Abeygunawardena said the company had already settled most of the claims and added that over 25 percent of the claims was settled on the day intimations were made.

"Of the 2,250 claims, 1,800 are motor and the rest are non-motor claims. Advance payments have been made to around 50 percent of the remaining claims, Abeygunawardena said.

The insurance industry hailed the setting up of the Insurance Trust Fund. By way of clarification, it said that reinsurance is a type of insurance wherein part of the risk taken by an insurance company is taken on by another insurance company.

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