Business chambers urge better urban, rural planning

By Lalin Fernandopulle and Sanjeevie Jayasuriya

Even as the insurance companies announced flexibility and quick respite in meeting the thousands of insurance claims arising from the recent island-wide storm disaster, two major national business chambers called for a return to systematic town and country planning in order to mitigate future storm damage to property and infrastructure.

The Ceylon Chamber of Commerce and, the National Chamber of Commerce, speaking to the Business Observer, demanded that government regulatory agencies and the local authorities quickly return to time-tested best practices of systematic planning of urban and rural area development. “It is such comprehensive systems of standards compliance for land and water use and, constructions, that can avoid serious damage and loss of productivity and logistics due to disasters of this scale,” a National Chamber official said. The Ceylon Chamber of Commerce is the country’s elite business chamber, while the National Chamber of Commerce comprises some locally-based big business sectors as well as the bulk of the small business community.

The weather catastrophe that struck the country during the past two weeks dealt a major blow to transport and logistics systems, agriculture, including cash crops and, thousands of small businesses. It has left a daunting task for the insurance industry which must now respond to its policy holders.

Insurance industry sources, however, insisted they were fully geared to compensate for losses swiftly and make payments for claims without delay and, put the afflicted parties and their businesses back on their feet.

Ceylinco Consolidated Director Ajith Gunawardena said all claims will be settled by June 3 and claims made thereafter will be settled within seven days. ‘We are prepared to face any calamity and take care of risks. We went out of the way to settle claims in full within a record time of three weeks when the Tsunami battered coastal areas. Claims were settled within 10 days when areas which were out of bounds were cleared. Even those who did not have a policy were paid,” he said.

Gunawardena said the company will consider to pay something of the value of the house that has been destroyed even though only the vehicle has been insured depending on the loyalty and duration of holding the policy. “We will not consider profitability at a time of a natural disaster. We have a task force working round the clock with the target of settling claims by June 3,” he said.

Asian Alliance Insurance, Director and CEO Ramal Jasinghe said settlements would be made as soon as damage estimates are made which could be one week to couple of weeks.

“We have received 20 claims in the non motor sector and around 180 in the vehicle sector. Hundred percent of the claims will be made and will take a lenient and a fair approach to claims of natural disasters,” Jasinghe said.

Asian Alliance moved out from corporate market and ventured into the retail market last year.

“The recent catastrophe will be an eye opener to those who have not obtained any insurance coverage and it will boost the need for housing and family insurance. Group affinity or community based insurance will make insurance affordable and technically viable,” Jasinghe said.

He said the insurance industry has been clamouring for retro-cession insurance or a reinsurance trust fund for a considerable period and now that it has been introduced it will ease the burden of the State during calamities of this nature.Reinsurance is a type of insurance wherein part of the risk taken by an insurance company is taken on by another insurance company. In effect, the initial insurance company buys insurance to protect itself in case a major calamity strikes and it has to pay out a large number of claims all at the same time.

HNB Assurance and HNB General Insurance CEO Deepthi Lokuarachchi said settlement of claims will be fast tracked once the estimates on damages to motor vehicles have been done.

“The motor and non motor vehicle sector have to be looked at separately. We have received around 300 claims in the motor sector. The issue is that the number of claims is rising since the water level has not receded. We received around 100 intimations and the number is increasing,” he said.

“The total loss claims will be settled within two weeks once it has been ascertained. With regard to property the valuation process is complex and many areas are yet inaccessible. The assessment of damages to industries will take time. However, we hope to settle claims on damages to houses within two weeks,” Lokuarachchi said.

Senaratne Insurance Brokers (Pvt) Ltd., Deputy Chairman Ainsley Alles said with regard to claims in general and the recent flood claims, we apprise the clients on the procedure to make a valid claim against their insurance policies. We don’t advise them to exaggerate the claim or make a false claim but guide them to make the correct disclosure of the loss and to obtain the best claim payment in terms of the insurance policy. We don’t envisage any disputes as we deal with reputed insurance companies, but should any dispute arises, we meet up with the client and the insurance representatives and amicably and professionally settle the differences. ‘The company assists clients in obtaining the best terms and professionally advise them on the appropriate insurance solution to their insurance needs. As a broker, it’s our duty to ensure that the client’s insurable risks are adequately covered and up to date at all times” Alles said.

A large number of houses and families affected by the floods and landslides are not insured, according to insurance industry sources. We are in the process of ascertaining the exact number of households that have not been insured.Two of the country’s m ain business chambers, the National Chamber of Commerce Sri Lanka (NCCSL) and Ceylon Chamber of Commerce (CCC) have conducted their own disaster relief campaigns. “We want to help the distress people as most of our members are unaffected. However, there is no proper mechanism for recovery as in most cases documentation is not available,” a spokesperson for the NCCSL said.

“Many of the organizations are conducting various activities to support flood affected people to enable them to fulfill their immediate needs,” he said. He warned that there could be “cascading effect” that would see further loss to the economy, while social costs could exceed the economic cost. He emphasized the need to have proper country and town planning to avoid similar situations in future.

The CCC spokesperson said that it is important to identify the affected people and assist them in regularizing their day to day activities. There should be proper planning and coordinating to mitigate the losses, he said.

The Sri Lanka Chamber of Small and Medium Industries said that they are prepared to help their members and the SME sector in particular to enable their businesses damaged by the recent floods to restart operations.

“In terms of statistics, we do not have a clear picture. However, most of the SMEs are affected and its distribution channels are disturbed. Many ware-houses are under water and cannot be accessed,” Sri Lanka Chamber of Small and Medium Industries President Mohideen Cader said.