Insurance Companies received 15 claims against quake damage
“About 15 or 16 insurance claims have been received in Islamabad,” said the general manger of a leading insurance firm on condition of anonymity.
The quake, measuring 7.6 on the Richter scale hit Pakistan on October 8, causing widespread damage. Its epicentre was located 100 kilometres north of Islamabad. According to sources in the insurance industry, each claim varies between Rs 200,000 to Rs 500,000 – depending on the intensity of the damage to the buildings mentioned in the claims.
Reason for the small number of cases is attributed to lack of interest (that is actually taken as ignorance by the industry) on the part of the general public. However, industry experts admit that the number of claimants may increase by the end of the year. “It has only been five months since the earthquake, the number of claimants might go up but probably not very substantially,” sources said.
However, fresh queries have started coming from residents. Industry sources pointed out that concerns of the residents of Islamabad were increasing and more people were inquiring about their insurance claims. Some people have expressed interest in extending their existing insurance policies, sources said. “They want to include earthquake risks in addition to fire risks,” said an insurance company executive.
Insurance companies primarily offer insurance against fire risk to their clients as basic policy, followed by optional offers such as earthquake, storm and riots risk. The insurance companies charge nominal premiums (1.5 percent) i.e. Rs 150 per annum against a policy of Rs 100,000. Industry sources said that marketing departments of insurance companies have begun focusing on residential insurance policies. Insurance salesmen are instructed to attract clients with a variety of policies on risks associated with residential buildings. “We are expecting to sell more policies this year as compared to previous years,” said one marketing employee of an insurance company.
However, the trend of getting insured is not very popular in Pakistan. This could be judged from the fact that the number of insurance companies in Pakistan has reduced to 37 as compared to 73 in 1970, said industry experts. According to sources, people are generally very cavalier towards contemplating future risks and they even avoid insuring their factories and other business concerns.
The only boost to the industry occurred after 2001 when banks introduced car leasing at affordable rates. According to sources, the insurance industry registered a phenomenal growth after the surge in car leasing, as the banks were refusing to lease cars without insurance.
Some banks have also introduced policies such as crop insurance. But insurance industry believes that the policy has not been able to attract farmers. Insurance experts said that the policy on crop insurance has been available since the time of President Ayub Khan but no major break through has been reported.
Source: The News
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