Disaster coverage few among insured: Jasindo
Urip Hudiono, The Jakarta Post, Jakarta
Insurance companies will likely be spared from having to bear the brunt of the quake and tsunami that devastated Aceh and North Sumatra on Dec. 26, as it turns out that few insurance policy holders are protected against natural disasters.
Major insurer PT Jasindo, for example, said only 877 of 15,030 insurance policies issued by the company in Banda Aceh and Lhokseumawe, or less than 6 percent, had included coverage against natural disasters -- volcanic eruptions, earthquakes and tsunamis.
"Of 1,711 fire insurance policies in Banda Aceh alone, only 76 were complemented with an additional policy for such catastrophes," Jasindo public relations manager Dewi Poedji Astuti said on Tuesday.
Jasindo is one of the largest general insurance companies operating in the area. Its clients include major corporations such as state-owned telecommunications company PT Telkom and fertilizer producer ASEAN Aceh Fertilizer (AAF).
The Indonesian General Insurance Association (AAUI) recently reported that the estimated total risk value of insurance policies in Aceh and North Sumatra covering earthquakes stood at Rp 16.8 trillion (US$1.87 billion), consisting of 22 properties insured against quakes in Aceh valued at Rp 796 billion and 429 in North Sumatra, worth Rp 16.1 trillion.
Telkom's risk value stands at Rp 297.6 billion, while AAF's is $45 million. Telkom alone reported that it had suffered losses of up to Rp 161.9 billion in equipment from the tsunami, which claimed at least 94,000 lives.
AAUI chairman Frans Y. Sahusilawane said the figure was only some 4 percent of the country's total insurance risk value.
"This shows that there are still many insurance policy holders who are yet to realize that they should guard themselves against potential losses caused by natural disasters," he said.
Dewi agreed with Frans, saying that many insurance policy holders were reluctant to sign up for an additional coverage scheme against natural disasters to, naturally, avoid a higher premium.
"Complementing an insurance policy with a protection against natural disasters would almost double the premium. But now, after the disaster, many of our clients have requested such schemes," she said.
Despite the possibility of "escaping" many insurance claims, insurance companies say they have no intention of taking advantage of the situation. They promise to commit to paying any legitimate claims and to facilitate insurance policy holders in the claim procedure.
"For Jasindo's part, we have been proactive in opening all our branch offices and sent a team to the region to immediately assess possible claims," Dewi said.
AIG Lippo vice president Budi Suharto said several insurance companies had met with the finance ministry's insurance directorate, agreeing on an easier procedure for the claims.
"Claims can be disbursed to those other than heirs of the insurance policy holders, as long as they are verified and approved by a court," he said.
AIG Lippo has issued 2,100 life insurance policies worth Rp 105 billion in Aceh and North Sumatra. The insurer has so far received 13 claims and disbursed payments for one.
Angger P. Yuwono from the Indonesian Life Insurance Association (AAJI) suggested that the claims could also be disbursed based only on an official list of victims issued by the government.