UAE: Orient to pay Emaar $332 mln in The Address fire claim
Source: Middle East Insurance Review | Mar 2017
Dubai’s largest listed developer, Emaar Properties, has announced that it would recover AED1.22 billion (US$332.2 million) in an insurance claim arising from the highly publicised fire at The Address Downtown hotel on New Year’s Eve in 2015.
In a statement to the stock exchange, Dubai Financial Market, Emaar said that the claim would be paid by UAE-based Orient Insurance. The claim to be received will be recorded as income in its fourth-quarter 2016 results, which are yet to be released, at the time of writing.
The fire at the 63-storey tower, which has since been shut, was caused by an electrical short circuit, according to the police. The hotel is expected to re-open in the middle of this year following restoration work.
Orient, which is part of UAE’s Al Futtaim Group, said it insures all Emaar’s properties alongside regional and international reinsurers.
Last December, Orient’s Group President Omer Elamin said that his company had agreed to the settlement after consultation with lawyers and insurance experts, reported The National.
The fire intensified concerns about the aluminium composite cladding panels used in high-rise buildings across Dubai that have been blamed for the rapid spread of fires in the country. The UAE has since revised fire safety regulations that took effect this January.
In March last year, Mr Elamin initiated a market meeting of all insurers in the UAE together with major reinsurers. A spate of fires had raised concerns over the pricing of policies for buildings using cladding. Through this well-attended meeting, the industry reached an understanding to increase rates. Insurers which attended the meeting felt that it was time to take action to create a balance between the risk exposures and the premium rates being charged. Excessive competition had led to deteriorating premium rates.
AED1 = US$0.27