Indonesian insurance brokers call for riot payments

Indonesian insurance brokers call for riot payments

SINGAPORE (Reuters): An Indonesian insurance brokers group has said it was deeply concerned about a delay in acceptance of claims arising from May's riots.

The Association of Indonesian Insurance Brokers (Asosiasi Broker Asuransi Indonesia, or ABAI) said in a statement yesterday; "there was a general consensus Indonesian property insurance policies would admit the rioting and criminal damage which ensued.

"However, a recent denial issued by Singapore Reinsurers Association (SRA) has prompted a delay in local insurers' formal acceptance of the claims.

"ABAI as representatives of the insuring public have become deeply concerned about this development."

In May, one Indonesian government minister estimated damage from some of the riots at US$210 million, while an insurance source said eventual claims costs would be much higher.

The Indonesian brokers said the contention of some insurers and reinsurers appeared to be that the riots were part of a popular rising, which would be a political act excluded from coverage.

"However, ABAI's view is that the riots cannot be considered part of the political reform process which was taking place simultaneously and was largely peaceful," the statement said, noting political reformers had distanced themselves from the rioters' acts.

"The forces of law and order have declared that the rioting was sporadic and criminal in nature," the ABAI statement added.

It was encouraging that several foreign insurers operating in Indonesia had formally admitted liability for riot claims, the statement said.

Citing other precedents for accepting riot claims, it said: "Singapore reinsurers must therefore appreciate that the scale of the disturbances compared to the size of the Indonesian nation and its assets cannot reasonably be construed as a popular rising."