Insurers Assessing Iran Quake Losses

Iranian insurance companies have started evaluating the losses caused by the recent massive earthquake that shook the western Kermanshah Province near the Iraqi border and processing payment of compensations.

The 7.3 magnitude earthquake killed more than 500 people and injured thousands. It also led to the destruction of many homes, including the state-managed Mehr Housing Plan–a housing project initiated by the former administration.

“Early estimations put the total losses of the earthquake at 26 trillion rials ($641 million),” Mojtaba Nik-Kerdar, Kermanshah Province’s vice governor, told ISNA on Wednesday.

He added that 8 trillion rials ($197 million) of the losses pertain to properties located in the damaged area, including houses, commercial units and offices.

   Only 2-3% of Properties Insured

Ebrahim Hamidi, a member of Iran Insurance Company’s Strategic Council, said only 2-3% of the properties located in the area are insured.

Iran Insurance Company, the largest and the only state-owned firm in the country, has so far paid 54 billion rials ($1.3 million) to 1,320 claims, according to the company’s website.

The total losses paid by Iran Insurance Company are projected to reach 300 billion rials ($7.7 million).

Alborz Insurance, a private insurance company and one of the largest firms in the market, has also announced that 8,000 housing units and buildings in the damaged areas are under its coverage. The firm is currently evaluating damages.

According to Risknews, Mehr housing units located in the area are insured by Arman Insurance Company. The earthquake, in some parts of the area, has caused 90% damage to the residential units built as part of the housing project.

Alireza Bayanian, Arman’s CEO, confirmed that his company is committed to pay compensation for Mehr residential units and other homes purchased using loans provided by Bank Maskan, the agent bank of the housing sector.

“We are waiting for the bank to send us a detailed report,” he added.

Moallem (Persian equivalent for teacher) Insurance has also paid 20 billion rials ($491,000) as compensation to earthquake survivors. It has insured all students across the country.

Novin Insurance, Pasargad Insurance, MA Insurance and Sina Insurance have also sent expert teams to the area to assess the losses incurred.

That is while Abdolnasser Hemmati, the president of Central Insurance of Iran, recently emphasized the necessity of establishing a natural disasters insurance fund.

“A bill aimed at setting up such a fund was presented by CII several years ago, but has remained in limbo,” he said, urging the government and lawmakers to help ratify the bill, the realization of which would mark a revolution in the earthquake insurance industry of Iran.

The official said that as insurance remains optional, a majority of people cannot be expected to enjoy the benefits of earthquake insurance, noting that fire insurance, which includes earthquake insurance, will be mandatory as per the new bill.