Agreement for the establishment of a fund for natural catastrophes

Following the severe floods witnessed by the country and the economic losses of 41 billion USD, the Organization of Insurance Commission (OIC) and the general insurance association have agreed to set up a fund designed to cope with natural catastrophes. The establishment of such a fund has been deemed necessary in view of insurers’ estimated losses whose amounts range between 5 and 10 billion USD. Henceforth, a premium increase seems to be inevitable. Reinsurers are refraining from covering local insurers as long as the authorities have not elaborated a new management plan of water drains. Foreign reinsurers detain about 90% of the local cessions.