Only some 15,000 homes insured against cyclones: Tower Insurance

Tower Insurance Fiji general manager Sarah-Jane Wild while presenting on the challenge of cyclone insurance at the Construction Industry Council (CIC) conference on Saturday, June 16, 2018. Picture: SUPPLIED

ONLY 6.25 per cent of the more than 240,000 homes in Fiji are insured against cyclones – which is approximately 15,000 homes.

This was highlighted by Tower Insurance Fiji general manager Sarah-Jane Wild while presenting on the challenge of cyclone insurance at the Construction Industry Council (CIC) conference that ended at the Warwick Resort yesterday.

She was quoting statistics from a survey conducted by the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) program, which is a joint initiative of Geoscience Division, SPC, World Bank, and the Asian Development Bank.

According to Ms Wild, there were still some challenges that contributed to the low numbers of cyclone insurance in Fiji.

“If the cyclone certificate is not provided, there is simply no cover. However, there are existing structures that are potentially insurable,” she said.

“Fiji has only 18 engineers so any proposed increase in cyclone coverage could create an issue of a bottleneck and delay in service.

“Due to the difficulty to certify buildings as being fully compliant with building regulations from inspection of them in the completed state, engineers are reluctant to do certificates for existing builds or are placing waivers that limit their liability. Wooden houses are often declined.”

She also highlighted the high cost of appointing an engineer, which involved mitigation and revisits which is about $10,000 (as per RBF Technical note) with fees costing around $1400-$1600.

This is also taking into consideration the time taken to obtain the final certificate which can be between three months to one year.

Ms Wild also explored various opportunities for the insurance industry to improve their cyclone cover.

To get a cyclone cover, you have to have a valid engineers certificate of seven years with few engineers issue up to five years only.

The forum also discussed the possibility of extending the timeframe to longer than seven years.

Fiji is expected to incur, on average, US$79million a year in losses attributed to earthquakes and tropical cyclones.

In the next 50 years, Fiji has a 50 per cent chance of experiencing a loss exceeding US$750m and casualties larger than 1200 people, and a 10 per cent chance of experiencing a loss exceeding US$1.5billion and casualties larger than 2100 people.

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