We work in the insurance industry where at times rumours and hearsay may travel faster than our pace at work; of course we get the buzz coming from our grapevine, some being rumours and hearsay, but some are definite news but somehow missed out the underlying facts. If we did miss out, rumours start developing….
This week we managed to capture some of those stuff…. and as I put it, maybe just rumours or hearsay spreading around, so please don’t get so worked up.
Thailand Political Uprising
The first one is already news (but the underlying facts are yet to be known) about the Thailand insurance industry where one insurer failed to defend the case brought forth by the insured(s) against them for repudiating a loss caused by the last political demonstration by the “reds” against the Abhisit government. The government at that time declared the uprising as one tainted with politics, coupled with element of terrorism with intention to overthrow the then government.
As the risk was more than 98% reinsured the insurer then seek the advice of the lead reinsurer, and the decision then was to reject the claim outright, which was the most sensible thing to do. Now that the court had decided that the loss was caused by a series of malicious acts and elements of riot committed by a small group of those who participated in the demonstration. While the demonstration was politically inclined but the direct cause of the loss was malicious rather than the act of political uprising.
In short all insurance losses linked to this are payable. Heard…. the losses totalled up to a whopping USD 220 millions.
The procedures in regard to making an appeal in Thailand courts can be quite complicated if we grew up with English laws. First, the appellant would need to put up a bond with value equivalent to the amount claimed by the respondent(s) with some interest added on. Secondly if the appellant loses then there would be punitive damages imposed and so on…. The rest of the complication just can’t be listed here without carrying out research…. but anyway that’s not important.
So, there you go…. as most reinsurers did not provide for such losses they will now need to go back to their claims department to have the claim reserves officiated into their books. USD 220 millions is no small sum, especially most have been trying hard to get out off the Thai flood nightmare.
The other part is perhaps the interpretation of the exact meaning of the extra-obligatory clause within the treaty contact…. it is a norm contracts do not provide for punitive damages but if the appeal option is to be taken up with the consent of the reinsurers then this maybe payable.
Have a review off what’s written on the Bangkok Post:
A Bangkok court has ordered insurer Deves Insurance Plc to pay client Central Pattana Plc 3.7 billion baht in claims for damage caused by a fire at CentralWorld at the end of the red-shirt protest at Ratchaprasong, in downtown Bangkok, in May 2010.
In its notification to the Stock Exchange of Thailand on Friday, Central said the court of first instance had ruled on Friday in favour of CPN.
The court ordered Deves Insurance to pay compensation for property damage in the amount of 2.71 billion baht and compensation for loss of income in the amount of 989.8 million baht, with interest of 7.5% per annum from March 31, 2011, until such amount was fully paid by Deves Insurance, the notification said.
Deves Insurance can appeal the judgement within 30 days, and the period may be extended at the discretion of the court. The case was filed on Dec 16, 2011.
CentralWorld was at the centre of violent political clashes in Ratchaprasong during the 2010 riots.
CentralWorld and the adjoining Zen Department store were set on fire on May 19, 2010 during the military crackdown on red-shirt supporters at the end of the protest. Arsonists were blamed.
Uni.Asia General looking for buyer
Heard…. Royal Sun Assurance (RSA) is now conducting due diligence audit on Uni.Asia. Previously Liberty and Fairfax were known to had done similar audit on them. Looks like they are off.
News from Etiqa
Etiqa group CEO, Hans De Cuyper had left in a haste…. some sources said he had not been in charge since the end of 2012. Rumour has it from a personal affair…. to some irreconcilable differences with someone higher up that lead to his leaving the company.
Pickering 2.0 against Great Eastern’s CEO
What made those GE agents ago angry that they have to work up a demo and threatening a walk out against the CEO? It is damaging the brand…. Can’t they have a sit down discussion to resolve issues….
So much for news that had yet to be verified and validated…. thought jumping the gun would spice up the industry…. what do you think?
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