Disaster coverage few among insured: Jasindo

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.