Insurer pays out 1st tsunami claim to Semen Andalas

Insurer pays out 1st tsunami claim to Semen Andalas

The Jakarta Post, Jakarta

Local insurance firm PT Asuransi Wahana Tata settled on Wednesday
the first insurance claim by tsunami-hit PT Semen Andalas
Indonesia, whose plant in Nanggroe Aceh Darussalam was badly
damaged by the disaster on Dec. 26, 2004.

In a little more than seven months after the disaster, the
insurance company paid 25 million euro (about US$33 million) as
an interim payment to the cement producer to cover damage and
loss to property and investments located at Lhoknga on the west
coast of Aceh.

Based on Wahana Tata's report, the interim payment is only
half of Semen Andalas's total claim, which it is estimated will
reach 50 million euro, or $65 million.

A report by the Indonesian General Insurance Association said
that it was the biggest claim ever in the country in terms of
losses arising in one location.

The association estimated that total claims related to the
tsunami could reach Rp 2.2 trillion (US$225.18 million).

Wahana Tata president director Robert Jeremia said the payment
was made even before the claim procedures had been fully
finalized due to support from the Swiss-based XL reinsurance
company and PT MAIPARK, a firm specializing in earthquake
reinsurance.

"To date, our loss adjustor is still working on finalizing the
adjustment," he said, adding that his company had hired an
Indonesian company affiliated to Singapore-based loss adjustor
Insight.

Robert said the decision to speed up payment of the claim was
based on his company's desire to participate in accelerating the
reconstruction of Aceh.

He added that the rest of the payment would be settled some
time between the end of the year and middle of next year after
the adjustor had finalized its report.

Semen Andalas president director Thomas P. Ehrhart said the
payment was the fastest settlement of a claim ever experienced by
his company.

"It is unusual to see a payment like this being made in such a
short time. The payment is vital to helping us while we are at
the early stages of rebuilding the plant," said Ehrhart, who
added that the company's total losses could exceed $90 million.

Thomas added that besides property losses, 183 of the
company's 650 employees had been confirmed dead.

Coordinating Minister for the Economy Aburizal Bakrie, who
witnessed the payout, said the speed with which it had been made
reflected the commitment of Indonesian insurers to complying with
their binding contracts with those insured.

"It is important for Indonesia to show that its companies are
fulfilling their obligations," he said, while urging Lafarge, a
France-based company that owns a majority stake in Semen Andalas,
to consider increasing its investments here.

Responding to the minister's remarks, Ehrhart said the besides
being committed to rebuilding the Aceh plant, which was expected
to resume full operation in 2007, Lafarge was looking at the
possibility of building other plants in Sumatra.

"We may consider building the next plant in Medan, North
Sumatra," he said. "But first, we will focus on rebuilding the
Aceh plant." (006)