The London-based International Underwriting Association has issued a statement offering its condolences to the relatives of victims of the Asian tsunami disaster.
IUA Chief Executive Marie-Louise Rossi, stated: “The enormity of the human tragedy is difficult to comprehend and our thoughts are with the victims of this catastrophe. The economic cost will also be significant, but it is unlikely that many of these losses will be insured.”
She indicated that according to the current best estimates from IUA member companies total insured losses are expected to range between $5 and $10 billion. In an interview with the BBC Rossi stressed that under the circumstances gathering information continues to be quite difficult. “It’s still quite early in the process,” she said.
In the IUA bulletin Rossi noted that, “in recent years a number of countries in South East Asia have developed financial service industries and many claims will be met by local companies. ” However, she said that some liabilities “will have been reinsured through the London Market and IUA members will be prepared to meet their obligations in this respect.”
Rossi told the BBC that for IUA members [and assumedly for other global companies] claims would mainly be made by companies who are part of the international tourist industry. “Very little seems to have been insured locally,” she said. As a result international insurers will pay only a small portion of the overall losses, and the costs of rebuilding.
Those efforts will have to be funded by the international community – aid agencies, governments, companies and private donors – which so far has responded with extraordinary alacrity to the catastrophic situation.
Rossi also indicated that efforts to predict and prevent future catastrophes should not be neglected. She pointed out that “the insurance industry has funded much academic research into earthquakes, tsunamis and other natural hazards. The IUA and its predecessor LIRMA have, for example, published a series of ‘Earthquake Hazard Atlases’ designed to help underwriters with the assessment of risks around the globe.”
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