Local insurance firm PT Asuransi Wahana Tata settled on Wednesday the first insurance claim by tsunami-hit PT Semen Andalas Indonesia, whose plant in Nanggroe Aceh Darussalam was badly damaged by the disaster on Dec. 26, 2004. In a little more than seven months after the disaster, the insurance company paid Euro 25m as an interim payment to the cement producer to cover damage and loss to property and investments located at Lhoknga on the west coast of Aceh. Based on Wahana Tata’s report, the interim payment is only half of Semen Andalas’s total claim, which it is estimated will reach Euro 50m.
A report by the Indonesian General Insurance Association said that it was the biggest claim ever in the country in terms of losses arising in one location. The association estimated that total claims related to the tsunami could reach Rp 2.2 trillion (US$225.18m).
Wahana Tata president director Robert Jeremia said the payment was made even before the claim procedures had been fully finalized due to support from the Swiss-based XL reinsurance company and PT MAIPARK, a firm specializing in earthquake reinsurance. "To date, our loss adjustor is still working on finalizing the adjustment," he said, adding that his company had hired an Indonesian company affiliated to Singapore-based loss adjustor Insight.
Robert said the decision to speed up payment of the claim was based on his company’s desire to participate in accelerating the reconstruction of Aceh. He added that the rest of the payment would be settled some time between the end of the year and middle of next year after the adjustor had finalized its report.
Semen Andalas president director Thomas P Ehrhart said the payment was the fastest settlement of a claim ever experienced by his company. "It is unusual to see a payment like this being made in such a short time. The payment is vital to helping us while we are at the early stages of rebuilding the plant," said Ehrhart, who added that the company’s total losses could exceed $90m. Thomas added that besides property losses, 183 of the company’s 650 employees had been confirmed dead.
Ehrhart said the besides being committed to rebuilding the Aceh plant, which was expected to resume full operation in 2007, Lafarge was looking at the possibility of building other plants in Sumatra. "We may consider building the next plant in Medan, North Sumatra," he said. "But first, we will focus on rebuilding the Aceh plant."