9 September 2015 Insurance

Tianjin disaster should serve as a warning to re/insurers: Gen Re

The Tianjin explosions that occurred in August should serve as a warning to the re/insurers, according to Gen Re.

Tom Qiu, Gen Re property/casualty country manager, Greater China, Shanghai, said the disaster, which saw massive explosions in the port of Tianjin, northern China, killing more than a hundred people, should remind insurance and reinsurance experts that large unexpected losses do happen and highlight the importance of underwriting “known unknowns”.

Qiu said: In their efforts to ensure good risk management, accurate assessment of exposures, appropriate coverage terms and adequate pricing, it is especially important for insurers and reinsurers to actively identify, effectively monitor and pro-actively manage their aggregates when they are located in high-hazardous zones and highly concentrated areas, such as chemical storage parks, ports and harbours.”

It was estimated by Fitch Ratings last month that the explosions could cost Chinese insurance companies $1.5 billion.

Qui added: “Three weeks after the explosion, our industry is faced with the huge challenge of claim adjustment and settlement.

“The cost of decontamination and clean-up remains up in the air; repair, residual value and salvage are all extremely complex topics for the insurance community.

“Claims handling and final settlement will prove to be a challenge due to the multiplicity of insured interests, policies and carriers across multiple countries.”

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