Mirza: Few will buy such expensive policies
Corporate insurance rates for policies that protect against acts of war have sky rocketed, with rates going up five fold since June, said Assaad Mirza, president of the Association of Insurance Companies in Lebanon (ACAL) and chairman of Capital Insurance.
Two of Capital Insurance’s big corporate clients have recently asked to expand their cover to include protection against acts of war, including conflicts between internal factions, in addition to riots and civil commotion. “Whenever there is an explosion everybody asks for quotations but few buy such insurance products as the rates are very high, only the big international corporations buy it,” said Mirza.
In light of recent attacks on American fast food franchises in the country in reaction to a widely condemned YouTube video, the French Embassy has issued an advisory to its citizens to avoid gatherings and critical buildings, including the embassy building in Beirut, mainly on Friday (September 21).
Mirza said that protection against political violence is a special cover and rates change on a daily basis. He said that only the big reinsurers offer such insurance, but soon even they will not be able to give a quote because of the uncertain situation.
Chedid Re is the first local reinsurer to introduce political risk coverage in response to increasing demand for this kind of coverage. MetLife Alico also offers ‘war shield’ cover locally for both corporate and local customers.
Chedid Re’s policy protects against acts of terrorism, sabotage for political reasons, and war, but excludes damage arising from nuclear incidents, and damages resulting from confiscation, nationalization, expropriation, or detention.
Reported by Hani Bathiche
Date Posted: Sep 20, 2012