News Middle East24 Jan 2021

Lebanon:Beirut blast insurance payouts to date reach 3.6% of total

24 Jan 2021

Insurance companies have paid only 3.6% of about $1.5bn in insured losses arising from last year's 4 August explosion in Beirut Port, as they await the results of investigations into the incident.

The settlement of 3.6% of total compensation payable was cited in a report of the Insurance Control Commission, which is supervised by the Minister of Economy and Trade, Mr Raul Nehme, according to Anadolu Agency. 

The rehabilitation and reconstruction process has not yet begun more than five months after the blast which killed about 200 people and injured about 6,000 others, as well as caused massive material damage to residential buildings and commercial establishments. Damaged were about 62,000 housing units and about 20,000 commercial establishments.

When an accident occurs, insurance companies do not pay compensation until the cause of the accident is known, says Mr Cyril Azar, president of the Lebanese Insurance Brokers Syndicate.

He told Anadolu Agency, "If, for example, it appears that the port explosion was caused by a missile strike or a terrorist act, then about 95% of the resultant damage is not covered by insurance companies, because most customers do not have insurance against the risks of war and terrorism."

He pointed out that some insurance companies have paid compensation for damages that are limited and not significant, such as cars, doors and windows of houses, and those whose value does not exceed $10,000.

He added that this step (paying part of the compensation) was taken by the insurance companies on their own initiative, without waiting for the decision of reinsurers who await the results of the investigation before paying on claims.

The governor of Beirut, Judge Marwan Abboud, told Anadolu Agency that if insurance companies paid compensation to all those affected, this would constitute a solution to about 70% of the city’s destruction.

Mr Abboud added, "About 30% of the population whose homes were damaged returned to them after they rehabilitated them at their own expense or with the help of NGOs or the Lebanese army."

He added that "large buildings and destroyed commercial towers are waiting for insurance companies' compensation money."

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