Reinsurance News

Malaysian insurance group estimates flood claims payout at $720mn

29th December 2021 - Author: Katie Baker

The General Insurance Association of Malaysia (PIAM) has estimated the total payout from claims as a result of the floods that swept across Malaysia recently could total RM3 billion (USD720 million).

These estimates include actual and potential personal lines and commercial risks claims directly resulting from the recent flash floods and the upcoming monsoon season.

The country saw three days of torrential rain over a weekend which has caused severe flooding in eight states, partially submerging a number of towns and villages.

The government has come under fierce criticism for not issuing warnings in time and being slow to respond, with fears of the death toll rising sharply as more bodies are found.

As of the 27th, an estimated 51,000 people had been evacuated from their homes, of which most were from Pahang on the eastern coast of the Malay peninsula, one of the worst-hit states.

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In addition to above estimated total claims payout for this event, the general insurance industry is donating and contributing RM2.43 Million to a newly established Flood Relief Fund.

The fund is a Corporate Social Responsibility (CSR) initiative to support the adversely affected motoring community during these difficult times.

This initiative has been designed to help expedite claims settlement, provide additional special relief measures, and further ad hoc ex-gratia assistance, as determined by individual general insurers.

This CSR assistance will initially be in the form of a subsidy towards a clean-up at workshops for vehicles directly affected by the floods, capped at a one-off per vehicle subsidy of RM500 for cars and commercial vehicles, and RM100 for motorbikes.

Claimants will need to produce requisite evidence of flood damage to their vehicles and proof of previous insurance cover, which must be either currently insured or a vehicle that was last insured on 1st June 2021.

At this stage, the fund will be closed once the pledged amount of RM2.43 million has been exhausted.

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