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."