Companies impacted by turmoil in the Middle East are preparing to file insurance claims against disruptions to their business.
Insurers prepare for host of claims from trouble spots
Insurers are bracing themselves for a flood of claims from companies connected with Middle East trouble spots.
International companies have been facing serious disruptions since troubles erupted in Tunisia, Egypt, Libya and elsewhere, with many closing down operations and evacuating staff. Others have suffered property damage stemming from violent street protests.
Insurers say local companies with links to unpopular regimes face the possibility of investigators examining their assets.
Companies can take out specialist cover to protect themselves against civil unrest and expropriation by governments.
"Our expectation is that losses will increase and we may be requested to pay claims during the year, especially in Egypt, Yemen, Libya and Tunisia," said Khemais el Gazzah, a director at the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), an insurer based in Saudi Arabia and half-owned by the Islamic Development Bank.
ICIEC has already received notifications from companies in countries affected by civil unrest, saying they intend to claim for disruption to their business.
Egypt and Tunisia have stepped up their scrutiny of companies with government ties under pressure from citizens concerned about corruption in public life.
Staff strikes and government curfews have also hampered operations at some companies, said Mr el Gazzah.
Claims would also be made by small businesses whose exports to those countries may be affected by the turmoil, he said.
It is too early to assess the extent of claims, said Nila Davda, a senior executive at Sovereign Risk Insurance in Dubai. The company insures banks against loans given to companies operating in the region.
"At a minimum I expect there to be claims from damage caused by political violence," she said.
"The environment is very uncertain as we've gone from low to high risk in a matter of weeks, and how it unfolds will be different from one country to another."
In Egypt, Ahmed Ezz, the steel tycoon and former ruling party secretary general, was detained along with three former ministers by prosecutors, the state-run Middle East News Agency reported last week. Before his detention, Mr Ezz said he refuted all allegations of corruption and embezzlement of public funds made against him.
Mr Ezz is chairman of Ezz Steel, the largest independent producer of steel in the Mena region. The company says its plants have not been operating at full capacity because of the government-imposed curfew and communications disruptions.
A company spokesman yesterday declined to comment on whether it would consider making an insurance claim.
Meanwhile, strikes have continued at state-owned companies across the country, including Misr Spinning and Weaving, Egypt's largest public-owned company.
Workers have also gathered at several government-controlled companies in Sana'a, Yemen, to demand higher wages and the resignations of their managers.