BELARUS Re: Top 3 largest insurance indemnities paid in 2012
Last year was a successful one for BELARUS Re, the company managing not only to follow its business plan for 2012, but to achieve better results than expected in terms of premium production. Moreover, despite the difficult economic times, BELARUS Re was able to reduce the loss ratio for its portfolio from 12.39% in 2011 to 9.02% in 2012.
It is noteworthy that the loss ratio reduction took place in a year during which BELARUS Re had the opportunity to demonstrate its capacity of rapidly indemnifying significant losses. Three examples of some large insurance indemnities paid in 2012 by the Republican Unitary Enterprise “Belarusian National Reinsurance Organization” (BELARUS Re) may fairly illustrate the company’s ability to support its customers in challenging situations:
Westa-Dnepr fire (Ukraine): a USD 7.6 million loss was recorded following the major fire occurred at Westa-Dnepr business premises, in Ukraine. The fire was born by the hydrogen combustion caused by the overheating of the electric circuit. As a result, the accumulator batteries stock in the shop was destroyed, as well as a significant part of the technological equipment of the plant.
State enterprise has fulfilled its obligations under the reinsurance contract, by paing its share of the reinsurance recovery. Total size of the reinsurance indemnity paid in 2012 by the State enterprise amounted to USD 450 thousand.
Segezha Packaging fire (Russia): Another similar case occurred in Russian Federation where, on August 19th, 2011, the fire damaged the equipment, as well as the industrial and office buildings at Segezha Packaging business premises.
The total loss caused to the Insured by the fire amounted to USD 2.2 million. The share of the State enterprise in this loss was of USD 167 thousand and was transferred to the Reinsured in August 2012.
The Telkom-3 satellite loss: In November 2012, State enterprise has paid an indemnity for the damage caused due to abnormal Telkom-3 satellite launch (PERUSAHAAN PERSEROAN (PERSERO) PT. TELEKOMUNIKASI INDONESIA, TBK as an Insured). The satellite launch was conducted from Baikonur Cosmodrome, Kazakhstan. Due to abnormal operation of Breeze M, TELKOM-3 satellite has been injected into incorrect orbit. Using its jet engine, TELKOM-3 failed to reach the designated geostationary orbit, which resulted in its Total Constructive Loss. Due to the damage caused to the Insured and the inability to continue to use the satellite for its intended purpose, State enterprise paid its share of the reinsurance indemnity in the amount of USD 150 thousand. The total loss amounted to USD 185.3 million.
Although important, the above three examples are not represententing the biggest claims by BELARUS Re since the company’s setting out. The biggest claim was paid in 2008, following the total loss of CRJ-100LR Aircraft while taking off on Zvarnots Airport, in Armenia. The indemnity paid to the insured aviation company, BELAVIA amounted to USD 1.96 billion.
Belarusian National Reinsurance Organization (BELARUS Re) is the only reinsurance specialized company in Belarus. Entirely state owned, the company was set in November 2006.
The latest S&P’s assessment affirmed Counterparty credit and Financial strength ratings of Belarus Re at “B-” (stable outlook), in accordance with the same Sovereign ratings of Belarus.
During the last five years, BELARUS Re doubled the number of reinsurance contracts concluded, to 8,955 in 2012, when liabilities accepted by the reinsurer amounted to about EUR 21.4 billion. According to the preliminary figures published by the company, the net profit recorded in 2012 amounted to EUR 9 million, while the combined ratio decreased from 45.5% in 2011, to 29.8% in 2012.