Oman: Insurance firms brace for spate of storm-related claims

MUSCAT -- As normality returns in the wake of the havoc wreaked by Cyclone Phet in many coastal areas over the weekend, insurance companies anticipate a flurry of claims arising out of flood damage and other losses inflicted by the storm. While the bulk of the claims are expected to come from companies and organisations that suffered material loss and property damage as a direct result of severe flooding and water-logging, other claims are likely to be motor vehicle-related.

Scores of businesses and shops, especially in Qurum, suffered serious water ingress when a torrential downpour sparked a deluge along Wadi Adai, flooding shopping centres, fast-food outlets, banks and villas in and around the neighbourhood on Friday night. The shopping district was largely shut yesterday, as owners of shops and businesses assessed damage while others mobilised gangs of workers to clean up the tonnes of muck and debris deposited by the receding flood waters.
In anticipation of a rash of claims, a number of insurers have already begun putting in place special teams to expeditiously process claim requests.
Top officials of New India Assurance (Oman), a leading provider of motor and non-motor related insurance services, held an "internal meeting" yesterday to chalk out a strategy for handling claims as soon as they are received, said V Vishwanathan, Claims Manager.
"We decided to appoint a committee to receive and settle insurance claims both motor and non-motor related arising out of this weekend's storm. Going by early information received from the market, we believe there are 20 to 25 claims raised by our policy holders within the capital region alone. We expect to receive more claims in the coming days," Vishwanathan said.
Speaking to the Observer, he said the company anticipated claims from traders, shop owners, commercial houses and even large supermarkets that suffered damage in Cyclone Phet's wake.undefined Among the likely claimants are prominent foodstuff distributors and supermarkets that suffered the loss of perishable food items as a result of power outages at the height of the storm.Sporadic blackouts were reported in Sur, Al Kamil, Masirah and other places when the storm broke. loading also ruined foodstuff and supplies held in warehouses located in some low-lying areas, it is learnt.Insurance firms are also faced with likely claims from contracting companies whose under-construction projects, notably road and infrastructure developments, suffered some flood damage during the storm.Reports have been emerging of some impacts to construction sites at Sur, Al Amerat and elsewhere, but overall infrastructure damage is unlikely to be significant.Scores of cars were also washed away or damaged as a result of flooding in various regions and wilayats, it is reported."It's clear that preventive action and warnings by the authorities did help minimise the losses inflicted by the storm. Consequently, insurance payouts are unlikely to be huge," Vishwanathan added.A top executive of AXA Insurance (Gulf), another prominent insurer, also acknowledged that claims were likely as businesses weigh up the damage wrought by Cyclone Phet in the coming days."It is still very early to make a full assessment of the quantum of losses, but we have already received a few claims related to water ingress in properties located in low-lying areas. We have deputed our loss adjustors to these sites," said Deepak Kamath, Country Manager (Oman).Also anticipated are claims from car owners whose vehicles may have suffered flood-related damage, he added.One insurer contacted by the Observer lamented what he described as the wanton disregard displayed by many motorists who were out on "sightseeing" tours of the city during Friday's severe weather."I was appalled to see so many vehicles on the road despite the hazardous driving conditions. Except for those who had legitimate reasons to be at the wheel at the time, others should have stayed at home in line with safety advisories. A number of accidents could have been avoided as a result. In such instances, blame should lie entirely with the driver concerned, and not the weather per se," he said.Material damage and economic losses inflicted by Cyclone Phet is expected to be minor in relation to the devastation wrought by Cyclone Gonu in June 2007. Gonu claimed 49 lives and displaced around 67,000 people.The total economic cost in damage to public infrastructure, services, private businesses and homes, was estimated at between RO 1.25 billion-RO 1.5 billion, with infrastructure losses alone projected at around RO 1 billion. Several thousands of cars were left wrecked by flood waters. Reconstruction programmes, housing schemes and compensation payouts cost the treasury tens of millions of Omani rials.