Vanuatu_PDNA_Web

26 Tropical Cyclone Pam, March 2015
The insurance industry comprises three insurers (QBE–Domestic General, Dominion–External
General, Vancare–Domestic General) and six brokers (Aon, Chartered Pacific, and Poe-ma are
domestic; Marsh, Willis NZ, and Arthur J. Gallagher are externally based). QBE has 86% of the
domestic market and Lloyds underwrites 3% through brokers. They are licensed and regulated.
The group had reported to the RBV that by May 6, 2015, 620 claims had been received, which
translated to an estimated total loss of VT 11.8 billion, all in the private sector. Claims for VT 701.4
million have been settled. Three claims of VT 1.6 million for business continuity are being paid
progressively. Normally claims must be submitted within a fixed time period, but due to infrastructure
damage the insurers have provided some latitude, so the final numbers should be available by
May 30, 2015. Reporting by sector is not yet available, Table 12 was prepared in consultation with
industry members.
Table 12. Insurance
Claims and Payouts
by Category (VT
1,000)
Company / Market Share Category Claim Value a Payout Estimate b
Residential, Personal, Contents 3,565,320 3,303,522
QBE / 86%
Commerce & Tourism
2 Large Tourism Resorts 5,402,000 5,402,000
Commerce & Tourism 1,620,600 1,377,510
Other / 14R%
Residential 432,160 367,336
Commerce & Tourism 756,280 642,838
TOTAL 11,776,360 10,820,206
a. Sourced from RBV as at May 6, 2015. Allocation from industry discussion. Claims excludes the other one major hotel severely
damaged and insured offshore.
b. Payout estimated at 85% of claims by industry.
The tourism survey indicated that 6 of the 38 registered hotels in Port Vila did not have insurance,
and that in the rest of Efate less than 50% had insurance. There is no insurance in the Islands, and
no insurance in the agriculture sector. A large volume (versus value) of claims relates to the residential
sector. There are two big claims in the tourism sector for VT 5 billion. Net of residential, there is
approximately only VT 2.2 biliion in insured damage across the rest of tourism and commerce, and
this still excludes the other major hotel damaged (i.e., the Port Vila Holiday Inn). It is believed that
no insurance or underinsurance is common, with people often electing for high excesses to reduce
insurance premiums.
In the next phase, the insurers determine what claims they will settle and for how much. The
industry indicates that it is only now starting to assess and pay claims, and companies are expecting
to complete 70% of claims by October 2015 and the balance in 2016. The industry indicates that
typically 10% will go to litigation before agreement. Insurance generally covers the larger established
businesses, though even those business that have insurance may be facing uninsured losses arising
from insurance contracts that did not cover a Category 5 cyclone. In addition, only those buildings
with a valid engineering certificate are covered. Only a few businesses held business continuity
coverage, and damage to fences, ancillary buildings, access roads, and ancillary equipment was
generally not covered. Public sector assets (buildings, vehicles, information technology, etc.) are not
insured by commercial insurance. To minimize future event impacts, public asset insurance could be
a consideration for the government of Vanuatu going forward.