News Middle East09 Aug 2020

Lebanon:Insurers await results of probe into 4 Aug blast

| 09 Aug 2020

Insurance companies operating in Lebanon are awaiting the outcome of investigations into the 4 August devastating port explosion in Beirut, in order to be able to quantify the compensation they must pay to clients who include individuals, companies and the government.

Officials say that the explosion may have caused economic losses of $15bn and that many of these losses were not insured, reported Al-Arabiya.

Mr Elie Tarabay, president of the Association of Insurance Companies in Lebanon (ACAL), pointed out insurers have contracts with international reinsurance companies that may help them cover the damages, provided that the cause and background of the explosion are known.

He said in an interview with Al-Arabiya, that most buildings and homes within a 7km radius of the blast have been completely destroyed, which makes it difficult to determine the size of the damage in a short time. The explosion killed more than 150 people, injured more than 4,000 and has left thousands more homeless.

Insured losses

An insurance source, who asked not to be named due to the sensitivity of the matter, estimated insured losses from the blast at $2-3bn, including business interruption losses.

The first announcement of estimated insured loss was from Hannover Re which revealed its exposure could exceed EUR10m ($11.8m).

Munich Re said this week that the blast would likely cause big claims, but it could not yet give an estimate.

AXA and Allianz, two of the major global insurance companies operating in Lebanon, also said it was too early to come up with any numbers.

The Beirut explosion also destroyed residential and commercial properties, including restaurants and hotels, which sources say will likely account for the majority of insurance claims.

It is believed that the explosion was caused by 2,750 tons of ammonium nitrate stored insecurely in a warehouse in the port area.


 

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