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Disaster claims to reach $43m - insurers

By Hu Yuanyuan and Bi Xiaoning (China Daily)
Updated: 2008-05-23 07:04

China's insurance companies are expecting to pay out about 300 million yuan ($43.18 million) in claims relating to the earthquake, the insurance regulator said on Thursday.

"As reconstruction work gets under way in Sichuan, the number of insurance claims is expected to soar," Wu Dingfu, chairman of the China Insurance Regulatory Commission (CIRC), said.

Figures from the CIRC show that as of Wednesday, insurance companies had paid out 50.4 million yuan in claims, of which 42.97 million yuan is related to life insurance and 7.47 million yuan to property and medical insurance.

"This is the worst year the insurance sector has ever faced, and payouts will be far higher than any on record," Wu said.

Earlier in the year, insurance firms paid out nearly 5 billion yuan on claims relating to the snowstorms.

An analyst from Industrial Securities said the industry is expecting to pay out more than 400 million yuan on life insurance policies in Sichuan.

However, Wang Xiaogang, an analyst with Orient Securities, said the quake's impact on insurance companies would be "quite limited".

"According to our estimates, payouts relating to the earthquake will shave less than 1 percent off the value of listed insurance companies' shares," he said

The increased demand for policies in the wake of the disaster will also help offset the long-term impact, he said.

To speed up the claims process, several insurance firms have relaxed their usual requirements and extended their deadlines. All have set up 24-hour claim hotlines.

PICC, for example, has offered to handle claims on behalf of all insurance companies, via its 300 outlets in Sichuan, while China Pacific Property Insurance Co paid a 1.05-million yuan advance to the education bureaus of Pengzhou and Congzhou.

Despite their efforts, insurance companies are still having difficulties making contact with their customers.

Lan Yadong, vice-president of PICC Life Insurance Co, said: "Although our staff are making 100 to 150 telephone calls a day, they are still having problems getting through to some customers.

"In some cases, we discover that both the policyholder and beneficiaries are dead."

Also, many insurance company's branches have been destroyed, which makes the task of identifying policyholders even more difficult, he said.