News Middle East16 Aug 2020

Lebanon:ME insurers to bear brunt of insured losses from Beirut blast

16 Aug 2020

Insurers in the Middle East are expected to absorb a large part of the losses from Beirut's explosion on 4 August, with Lloyd's of London and other international players expected to be less exposed, reported Reuters quoting insurance industry sources.

Industry sources also said the major share of losses would be in property damage rather than in marine exposure to ships or the port itself.

“The majority of exposure will be on the building damage side and to the extent that it is covered beyond the property markets, there will be very significant business interruption,” a Lloyd’s of London market source said.

Survival

“Much of it (the risk) may be covered by local markets,” the source said, which could include insurers in Dubai.

One insurer in Lebanon told Reuters it doubted that all of the 60 insurance companies operating in the country would survive given the coronavirus, financial turmoil and the blast.

A Lloyd’s of London spokeswoman said it was too early to quantify the insured losses.

Lebanon has said it expects economic losses of up to $15bn from the blast, but industry sources said they expected insured losses of nearer $3bn, most of it in property.

The discrepancy is partly because emerging market countries like Lebanon may have lower levels of insurance coverage.

Lebanese officials have blamed the blast, which killed at least 172 people and left much of the capital in ruins, on a stockpile of ammonium nitrate catching fire after being stored unsafely at the port for years.

 

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