Business | General
Channel Sponsor
Wafi heist not to hit insurance rates
Despite last week's dramatic jewel heist at the Wafi City Mall, insurance analysts do not expect the cost of insuring business in Dubai against crime to increase.
- By Scott Shuey, Chief Business Reporter
- Published: 00:00 April 21, 2007
- Robbers looted an estimated Dh50 million worth of jewellery from a store at the Wafi City mall.
- Image Credit: Hadrian Hernandez/Gulf News
Dubai: Despite last week's dramatic jewel heist at the Wafi City Mall, insurance analysts do not expect the cost of insuring business in Dubai against crime to increase.
But the cost of insuring a jewellery store might, some say.
While many businesses purchase insurance to guard against loses caused by criminals, jewellery stores have insurance that provides special coverage, minus workers' compensation and general liability, said Mustafa Vazayil, managing director of Gargash Insurance Services.
Low rates
"We have been enjoying fairly low rates compared to the global markets," he said, attributing the relatively low cost of the insurance to the perception among international underwriters that crime rates in the region are very low. Vazayil said that the recent jewel heist "raises the potential" that jewellery insurance premiums could go up.
Other businesses may not see any impact of their insurance premiums. "Over the last two years there has been a softening of the markets, with both the cost of premiums and deductibles going down," said Paul Sterckx, AIG's assistant vice-president for Financial Lines for the Middle East. "This incident will not change it."
Sterckx said crimes of this type, despite that Hollywood-style drama, are extremely rare. You would have to have something of a much bigger magnitude to start affecting rates, he said.
"Because of the court system and punishments in the country, that type of crime is less prevalent. Crime is not the issue it is in Greece or Turkey, where banks can see as many as 30 robberies in a year. You don't see that here."
The insurance industry has also seen this type criminal activity before.
Vazayil said this type of smash-and-grab robbery is not new and was wide-spread 10 to 15 years ago.
Sterckx said that does not mean some businesses in the UAE do not need insurance to cover losses from crime.
Banks target
"Banks are the ones who needs it the most," he said. "While you wouldn't expect to get crime in the Middle East, it happens everywhere."
Sterckx said a larger concern for insurance industry was the people behind the counters, not customers who walk through the doors.
AIG in the Middle East usually has three to four large claims involving employee theft or fraud, and each claim averages around $3 million.
Losses from the robbery of the Graff jewellery store at the Wafi City mall were estimated at over Dh50 million ($13.6 million).
Share this article
Related Articles
-
Gang's end 'will be in Dubai'
Robbers who looted Wafi City store carried out more than 100 thefts in Europe
More from Business General
More from Business
Popular in Business
-
Budget travel
Airlines in the region
Take a pictorial look at some of the budget airlines in GCC
Business Editor's choice
-
Media baron Murdoch cries foul
Murdoch's suggestion of content theft infuriates digital evangelists
-
Jobs vital to global recovery
Higher unemployment reduces purchasing power and revenues
-
Abulhoul Aviation to begin operations
New charter company will use Cessna 206 Station Air to transport tourists
