Muscat – Tropical Cyclone Shaheen has been one of the largest weather events to hit Oman since Cyclone Gonu in 2007. The intensity of Shaheen resulted in damages initially from the cyclone and subsequent floods caused by the heavy rains brought by it.
Insurance companies will take a major hit on account of damage to the properties, businesses and vehicles during the cyclone.
Insurers in the sultanate are now bracing to receive a large number of claims due to the damages caused by the cyclone. The cyclone is initially estimated to have caused huge losses for the insurance and reinsurance companies.
Speaking to Muscat Daily, Sayyid Nassir bin Salim al Busaidi, chairman of Oman Insurance Association (OIA) said, “This cyclone will have a very big impact on insurance companies. The damage is going to cost a huge amount of money to insurers.”
OIA is a trade body consisting of insurance companies, insurance brokers, loss adjusters and others licensed by the Capital Market Authority to indulge in insurance activities.
Cyclone Shaheen inflicted horrendous damage in North and South Batinah and Muscat governorates, ravaging roads, public facilities, homes and businesses.
Busaidi said insurance companies in the coming weeks are expected to see a flood of claims in all segments – property, motor, and engineering insurance. As the severe flooding has far reaching implications for businesses in the affected areas, he said, the number and size of commercial claims are likely to be huge.
“However, it is too early to fully assess the damage and losses. People are busy in cleaning-up and dealing with damage and disruption. They have not yet started registration for claims. It may take many months to evaluate the full impact of this cyclone,” Busaidi, who is also the chief management executive of Oman United Insurance Company, said.
The chairman of OIA further said that the insurance companies so far have not received claims from individuals and businesses. “Once life gets back to normal, insurers will start receiving huge claims. The impact has been huge on property, vehicles, businesses and people. It will take time to send surveyors and evaluate the losses.”
When asked about the estimated cost to insurance industry due to the cyclone, he said losses arising out of the Cyclone Shaheen’s destructive sweep through a long area of the sultanate could reach hundreds of millions of rials. “We cannot estimate the amount as of now, it will depend on the damages. The area in which the cyclone has caused damage is very wide and large so the losses are also expected to be huge.”
Busaidi added that the additional cost of claims due to the cyclone will have a major impact on the profitability of insurance companies.