Insurance companies prepare for extensive claims following UAE storm

Published March 10th, 2016 - 06:00 GMT
Severe rains closed schools and Abu Dhabi airport, and caused widespread delays at Dubai's airport. (AFP/File)
Severe rains closed schools and Abu Dhabi airport, and caused widespread delays at Dubai's airport. (AFP/File)

Insurance industry is now heading for claims from Wednesday's rainstorm, industry officials said.

A strong storm that ripped through the Capital tore apart window panes of multi-storied buildings and in several places, rainwater entered into warehouses and stores, damaging the finished goods and raw materials. In other incidents, dozens of vehicles were partially or fully damaged.

It is a bit early to give any estimate on the damage, as it would take at least 3-4 days to get preliminary details of the extent of the damage. Only then can an estimate of claims be made, said P. T. Thajuddin, a senior manager, commercial lines at Abu Dhabi-based Insurance House.

He fears insurance firms would receive more claims compared to the previous rains as its magnitude was higher and damage was wide-spread.

Strong storms flooded under construction highways, washed away bridges and damaged engineering projects, he said. Since there are several under-construction projects in Abu Dhabi, damage could be severe, he added.

Another senior executive at an insurance company expected that the claims would be higher.

Ajaz Ahamed Lashari, a manager at Adamjee Insurance Company Ltd in Dubai, told Khaleej Times that the rainstorm was quite strong.

He said many people don't get insurance cover for natural calamities. However, businesses do get insurance cover.

Giving the history of major claims from rains and storms, Lashari said in 1985, the Capital received a severe hailstorm that caused a real havoc to public and commercial properties. It caused severe losses to insurance companies as they had to pay a large numbers of claims.

In Dubai, heavy rains caused substantial damages to commercial goods two years ago for which the industry had to pay a large sum in claims.

However, it was in 1996 when torrential rains continued for almost two weeks commercial and industrial assets faced huge losses. Since most skyscrapers and private, commercial and industrial buildings are insured as a policy to reduce risks, the number of claims could be much higher than expected.

Lashari said he won't be surprised if the insurance companies start receiving a large number of claims in the coming weeks and may end up in paying Dh400-500 million to their customers.

There are 73 insurance companies in the country, who are facing tight regulatory oversight which has reduced their earnings substantially.

 

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