Fire insurers are expected not to be significantly impacted by the massive Petronas gas pipeline blast that occurred on the outskirts of Kuala Lumpur on 1 April.
The brunt of the claims should fall on Petronas’ public liability insurer, according to MIDF Research, part of the financial services group, MIDF. But the financial impact on insurance companies is difficult to assess due to limited details of the damages.
The authorities said at least 305 people were affected, including those left homeless after around 190 homes were damaged. Scores of people were treated in hospitals. No deaths have been reported. The incident also damaged at least 148 cars and 12 motorcycles.
MIDF indicated that there would be a one-off impairment of MYR18m ($4m) to MYR25m for Petronas Gas, involving revenue loss, damage repair, public compensation, and reputational management. Additional costs of at least MYR5m are projected for compensation to industrial customers affected by operational delays.
The General Insurance Association of Malaysia (PIAM) said in a statement that policyholders must clarify with their insurers whether their home and contents policies cover damage caused by explosions. Insurers are expediting the claims process for all eligible motor, personal accident, retail fire, homeowners or household insurance policyholders. The association is also working with government agencies, the authorities, Bank Negara Malaysia and key stakeholders to ensure that those affected by the Petronas gas pipeline blast receive timely and necessary financial support.