The magnitude-8.8 earthquake that shook central-southern Chile on February 27 revealed that larger companies had adequate insurance or risk programs in place for this sort of catastrophe, despite the damage suffered to their operations and the effect it will have on production, Marsh executives told BNamericas.

“Have they taken actions to mitigate what the earthquake can do, do they have a contingency plan, do they have the right coverage, do they have the right limits, are they insured with the right insurer, all those things come into play when you have a catastrophe,” president of Marsh International Alexander Moczarski said.

“And in general, our clients do have contingency plans, have acted quite responsibly and will be an example for other countries. So I think corporate Chile was pretty well prepared for some type of an event.”

Marsh Chile’s client portfolio is mainly corporate, with a large book of mining, energy generation, energy distribution, infrastructure and general manufacturing.

“The damage affected Concepción all the way to Santiago; that is four to five regions, basically the industrial heartland. A lot of our clients were located in Santiago, Talca, Chillán, Concepción, and were affected,” Marsh Chile CEO Peter Foley said.

Some Marsh clients could have claims of over US$100mn, Moczarski said, adding that the contingency business interruption is hard to gauge right now.

Moczarski said Marsh is advising its clients to act as if they don’t have insurance.

“The principle is that if you’re acting as if you don’t have insurance, you’re acting in the right way, and insurance is there to support you in doing so,” he said.

“We really need insurance companies and adjusters to help our clients get back to operating as quickly as possible. That means limiting the bureaucracy to a minimum, being practical and making sure that they have resources, that the claims can get adjusted quickly,” Moczarski said.

The full interview with Alexander Moczarski and Peter Foley will be published in this week’s Insurance Perspectives, for subscribers only.

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