Fri, Oct 22, 1999 page17

• Taiwan insurers reluctant to give out quake policies

  COVERAGE Interest in earthquake insurance has risen since Sept. 21, but insurers say they prefer to stick with old customers -- and even then, not completely

  • By Stanley Chou / STAFF REPORTER
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  The total property damage from the 921 earthquake could reach NT$100 billion, according to an estimate by the Allianz President General Insurance (2峗w聯2?I), but insured losses only account for 25 percent of this total.

  Standard & Poor's estimated a week ago that the insured losses following the quake had reached NT$19 billion, a figure that the agency expected would continue to rise.

  As well as a large portion of the property losses being uninsured and a relatively low 5 percent of the insured amount to be paid by the local insurer, only 1 percent of households had supplementary earthquake coverage.

  That has changed since the quake.

  But, while insurers have been busy handling insurance claims, many corporations and households have found that it's not easy to find an insurer willing to sell an earthquake insurance policy.

  "We don't accept new customers who want to insure their factory. If they are old customers, we will normally cover only 50 to 80 percent of the amount to be insured for their earthquake insurance applications," said Lili Chen (3紕R??/CHINESE>), section chief of Fubon Insurance (富?2?I). "We still accept customers applying for house insurance, but with certain restrictions," she said.

  Fubon Insurance is one of the largest providers of property and casualty policies.

  Meanwhile, an executive from AIU Insurance Co Taiwan (美國環2y2?I) said that although his company still offered earthquake insurance to customers, it is extremely careful since there are so many damaged buildings and factories all over the island.

  "We don't want to sell a new insurance policy which covers a building that's already been damaged by the quake," he said.

  The reluctance of local insurance firms to go the extra mile on earthquake coverage presents an opportunity for international insurers, however, and Allianz is obviously keen to move in.

  Allianz provides earthquake coverage, mainly to large corporations, and it is continuing this policy despite the quake, said Hao-chi Lee (李浩2N), senior vice president of Allianz President General Insurance.

  "We also cover mortgage insurance policies for private individuals," he said.

  "We are providing our existing clients with the possibility of purchasing full cover at reasonable but realistic prices, and we are developing new products, including earthquake coverage, at a price that remains moderate and reasonable for new clients," said Allianz's Lee.

  Allianz President General Insurance (2?@|w聯2?I) established a joint venture with Uni-President in July this year. It is managed by Allianz AG, the largest insurance group and the fifth largest reinsurance group in the world.

  "The risk level between new and old insurers is different," said an executive from the Association of Property and Casualty Insurers (2?I?蔆|).

  Old insurers in Taiwan have taken a significant risk on their present policies, so that will limit their capacity to take more risks, he said.

  "But to a newcomer, its capacity would be much higher than the old ones. We certainly hope that the increased demand for earthquake policies can be provided by the insurers," he said.
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