KUALA LUMPUR: The unprecedented disappearance of Malaysia Airlines (MAS) Flight MH370 will possibly make insurers look at their risk accumulation and review gross retention.
Malaysian Insurance Institute chief executive officer Datuk Syed Moheeb Syed Kamarulzaman said this was due to the increase in casualties, which in turn, had caused a rise in claims.
“I do not think those already involved in aviation insurance will run away from that. They will just have to rethink their reinsurance programming.
“Life insurers will also review their stance on what is called the unknown accumulation and look at how the frequent happening of unfortunate events like this affects their underwriting outlook,” he told Bernama.
Syed Moheeb said the aviation policy’s coverage includes the hull insurance, also known as insurance on the aircraft, as well as, passenger liabilities.
He said if the aircraft was declared missing, the presumption would be that it crashed or disappeared, subsequently giving closure on the hull side.
While different countries have various laws on how to deal with ‘missing’ cases such as this, Syed Moheeb said insurance players would treat it sympathetically and not strictly literally.
“In some countries, people must wait for seven years before they can proceed with processing claims,” he added.
However, both the Life Insurance Association of Malaysia (LIAM) and General Insurance Association of Malaysia (PIAM) have come out with statements saying the next-of-kin of those onboard the ill-fated Malaysian jetliner could start filing their claims without waiting for the death certificate.
For life insurance companies, LIAM said it had settled most of the claims payment of RM16,875,246 by family members and the next of kin.
On March 27, LIAM president, Vincent Kwo said initial checks indicated that 47 of 50 Malaysians on board MH370 had life insurance policies with 14 life companies in Malaysia, while six non-Malaysians were also insured with LIAM members. — Bernama