Kathmandu. On the second day of the ‘Gen G’ movement, property and property worth Rs 15 trillion were destroyed in vandalism and arson across the country.
According to the non-life insurance companies, according to the preliminary assessment of the damage, the country has to bear the losses that were suffered during the earthquake of around 2072 BS.
The non-life insurance companies will bear the loss caused by the vandalism, arson and looting of Bhatbhateni Super Store, Hilton Hotel, Ncell, Nepal Telecom, Global College, private and public vehicles, industry godown, Central Business Park, CG Park Satungal, car showrooms etc.
According to the non-life insurance company, the loss of Hilton Hotel is estimated to be around Rs 6 billion, CG Park Rs 2 billion and a superstore in Bhat Bhatini between Rs 25 to Rs 700 million. Apart from this, it is estimated that around 300 four-wheelers will be damaged in the arson of car showrooms and private vehicles. Based on this, it is estimated that 300 vehicles at the rate of Rs 30 lakh per vehicle may have been damaged worth Rs 90 crore.
Birendra Bahadur Baidawar, president of Nepal Insurance Association, said that the burden of small losses will be more on the shoulders of domestic insurers than in case of big losses. Most of the big insurers are re-insured, so the insurer does not have to bear much burden, he said in a conversation with Insurance Khabar, but since the insurer himself holds 100 percent of the small insured, the burden is more.
According to him, the burden of insurance claims for damage to motor cars is high for non-life insurers.
The non-life insurers, who had increased their paid-up capital to Rs 2.5 billion in recent period, have increased their paid-up capital to Rs 2 million to Rs 30 lakh. That is, the insurer himself has taken the full risk of the loss up to this amount.
Although the Parliament House, Singha Durbar, the President’s residence, the Prime Minister’s official residence in Baluwatar, the minister’s residence, the provincial government building, the police office and the private residences of political party leaders have not been insured, the insurance companies are not in a position to bear the burden. As the government has not allocated budget for the insurance of public and government physical infrastructures, no property and vehicles have been fully insured.
The non-life insurance companies will have to bear the compensation for the damage caused by the protesters in the arson and vandalism caused by the protesters.
Chunky Chhetri, former president of the Nepal Insurance Association, said that the number of damages could be higher than the initial estimate. However, he said that he would have to wait for some time to ascertain the financial pressure on the insurers as not all the risks that have been seen and known are insured.
The Nepal Reinsurance Company (NBC) is now operating the ‘Hoolidunga Bima’ which was made mandatory in Nepal after the Maoists’ underground movement. As per the agreement, the concerned insurer will bear 35% of the loss of up to Rs 100 million and the rest will be borne by Nepal Reinsurance.
The Confederation of Nepalese Industries (CNI) and the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), representing the private sector, had been demanding that the insurance scheme be made voluntary, saying that the burden of the insurance scheme has been imposed forcibly as the incidents of rioting have been stopped in Nepal. However, the Nepal Insurance Authority has been giving continuity to this.
Surendra Thapa, chief executive officer of Nepal Reinsurance Company, said that although preliminary data of loss is being collected, information is yet to be received from all sides. When asked about the pressure on the bridge and reinsurance due to the loss, Thapa said, “We have re-insured, I think the reinsurance system will be enough.”
According to the preliminary details of the loss, it is estimated that the claim burden of up to Rs 1 billion will be on the shoulders of Nepal Reinsurance Company.
The Hilton Hotel is the most insured of the insured properties. According to experts, the insured of the hotel has been fixed at Rs 6 billion. According to them, the hotel is insured by Oriental Insurance and re-insured by Himalayan Reinsurance. Apart from this, only Rs 500 million worth of reinsurance risk has been transferred to Nepal Reinsurance Company through the insurance pool.
If Himalayan Reinsurance provides adequate reinsurance for the risk of the hotel, the foreign reinsurer will bear the loss caused by the mob riot. However, in the absence of adequate reinsurance, Himalayan Reinsurance will be burdened.
