China Insurance Regulatory Commission has sent a notice to the insurance companies, asking them to simplify the process of settlement of claims and increase efficiency for cases from the Tianjin Port blast last week.
Preliminary investigations estimate that the total insurance settlement amount for the incident could reach RMB10bn ($1.56bn), one of China’s largest.
According to an official from China Pacific Insurance, currently it still hasn’t been able to count specific losses due to the restrictions in the area, and the company is still evaluating.
“This extremely sad and regrettable incident demonstrates the persistent growth of accumulation of values in port and storage areas, particularly in highly industrialised regions. Recent examples include the floods in Thailand in 2011 and Hurricane Sandy on the East Coast of the United States in 2012 that caused the biggest marine cat loss ever,” said Dieter Berg president of International Union of Marine Insurers (IUMI).
IUMI said continuous growth of this type of large-scale risk is being driven by the trend for bigger container ships and the construction of extensive freight handling and storage facilities.
About 6,000 brand new vehicles stored at the port were destroyed in the explosion. Currently the port’s car import and export operations remain under suspension.
“With average retail values of $30,000 this could result in a loss of $300 million for vehicles alone. Container losses are likely to be spread among many marine cargo insurers but motor vehicle insurance is a specialist sector and so that market is likely to be hit hard,” said Nick Derrick, chairman of IUMI’s Cargo Committee.