Insurance pool for tree crop and forestry risks
Insurance pool for tree crop and forestry risks
JAKARTA (JP): PT Aon Lippo Indonesia and 20 local insurance
companies launched an insurance pool on Wednesday to underwrite
forestry and tree crop risks.
Junaedy Ganie, the president of Aon Lippo, a subsidiary of the
U.S-based insurance broker Aon Corporation, said the insurance
pool offered a special package to protect forestry and plantation
investors from losses due to catastrophe, such as fire,
lightning, earthquake, flood and pests. It will also extend
coverage to strikes, riots and civil commotion.
"This pioneer project will be a model for an insurance scheme
involving key insurers, reinsurers, risk managers and national
forestry and plantation customers under a partnership system," he
said, adding the project was the first of its kind in the world.
He said that insurance coverage was limited only to forests,
oil palm and rubber plantations, but in the future would include
cocoa and guava plantations.
He said the pool was established in cooperation with London-
based Agricultural Risk Management Ltd (ARM), which acted as a
technical supporter in its operation, and also comprised five
state-owned insurance brokers.
Members of the pool are Asuransi Central Asia, Asuransi Wahana
Tata, Asuransi Sinarmas, Lippo General Insurance, Asuransi
Bintang, Aspac General Insurance and Asuransi Jasa Indonesia.
Junaedy said the pool would also cooperate with European
reinsurers, such as Wellington 2020 of Lloyds of London, London-
based QBE and Zurich Re, ERC Francona in Munich, Partner Re in
Switzerland and Chiyoda.
Junaedy explained that the pool could accept any qualifying
risk up to Rp 80 billion (US$10.67 million) of which 15 percent
would be retained by local insurers with the rest by overseas
markets.
He added that the premium was based on value agreed within a
particular scale with a base rate of 0.853 percent, and would
impose a deductible of 20 hectares for forests and 5 hectares for
tree crops.
"To avoid claims caused by arson, the risk surveys and
assessments will be conducted by local loss adjusters approved by
Lloyd's of London securities company," Junaedy added.
Junaedy said the pool is open to more local or joint venture
insurers and insurance brokers in a bid to gradually reduce
foreign participation. (01)