Insurance Cost of the WestGate incident; Kenya

An Extract from the Insurance Insider:

 The Lloyd's market is the insurer of the Nairobi Westgate shopping mall attacked by armed Somali militants on Saturday (21 September), but the total sum insured is a relatively modest $76mn, The Insurance Insider can reveal.

Emerging markets political violence specialist Chaucer heads the political violence placement that was taken out by the mall's owner, the Kenyan company Sony Holdings.

Chaucer is supported by a list of blue-chip Lloyd's markets including QBE, Liberty Syndicates, Hiscox, Novae and Canopius.

However, the total sum insured for property damage and business interruption, covered on a full-value basis, is understood to be some 6.7bn Kenyan shillings, or $76mn.

The political violence cover includes terrorism and carries a deductible of $50,000 for property damage and seven days for business interruption, with a 24-month indemnity period.

However, the property cover is believed to exclude contents. The business interruption cover will respond to loss of rent receivable from individual mall tenants, but will avoid tenants' loss of profits, which are either insured separately or uninsured.

Sources suggest it is too early to estimate the total claims burden, although initial evidence gives grounds for optimism that the mall is unlikely to be a total loss.

Lloyd's has a strong trading relationship with Kenya, and the market for political risk insurance has grown significantly in the East African nation since it suffered months of widespread political rioting following the disputed December 2007 presidential elections.

NB: The extent of loss is expected to approach total loss owing to the recent developments of the collapse of three floors.

Further information........ http://www.businessdailyafrica.com/Westgate-insurer-faces-Sh6-6-billion-compensation-bill/-/539546/2007294/-/item/1/-/p7982l/-/index.html