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PORT MORESBY, Papua New Guinea -- Papua New Guinea's insurance industry expects few property/casualty claims for damage caused by three large waves that devastated fishing villages in the Sanduan Province in the northwest part of the country.
The waves, caused by an earthquake last month, destroyed remote villages in a 19-mile area close to the Irian Jaya border. Government officials have confirmed that 1,600 people have been killed and 2,000 are still missing.
David Macrae, executive director of Port Moresby, Papua New Guinea-based broker Kila Marsh & McLennan Pty. Ltd., said the financial loss was "substantial, even though only basic houses were destroyed." But few, if any, owners of those homes would have insurance, Mr. Macrae said.
Lyall McEwin, Papua New Guinea manager of Port Moresby-based General Accident Insurance Asia Ltd., said his company had received no commercial claims from businesses in affected areas as of July 22 and had received only one domestic house and contents claim.
He said the company had received and agreed to pay a 25,000 kina ($10,625) domestic house and contents policy claim from the owner of a mission house at Aitape, one of the villages destroyed.
Mr. Macrae said Kila Marsh & McLennan Pty. Ltd. has no business in the area.
Mr. McEwin said commercial and domestic property coverage against such waves is rare, but some insurers, including General Accident Insurance Asia Ltd., provide coverage selectively to some businesses and homeowners. He said he expects claims to be made only by church organizations and forestry operations that had property in the affected area.
Mr. McEwin said many church organizations in Papua New Guinea have commercial property coverage but no business interruption coverage. Mr. Macrae said that because they are in very remote areas and the buildings are simple structures, missions in the villages are unlikely to be covered. Mr. McEwin said it is possible some forestry operators could make commercial property and business interruption claims, but insurers would have to determine whether policies included coverage for the seismic sea waves.
Mr. Macrae said few, if any, villagers bought insurance. "I guess most villagers and traders would not have insurance because they can't afford it -- it is really subsistence living."
Another Port Moresby broker, who declined to be identified, said traditional houses such as those in the destroyed villages were uninsured.
During a visit to the devastated area last week, U.S. Secretary of State Madeleine Albright announced an aid package of more than $1 million for rescue efforts and a seismic early-warning system to prevent similar disasters in the future.