Yangon’s iconic Kandawgyi Palace Hotel, which was destroyed by a fire in the early hours of October 19, will be covered by insurance, according to U Lwin Oo, Deputy General Manager, Fire and Engineering Works Insurance Section, Myanma Insurance.
The Htoo Group, which owns Kandawgyi Palace Hotel has bought insurance worth almost K1.5 billion for the hotel. Two policies worth K 855 million and K75 million are from State-controlled Myanma Insurance while one more policy worth of K523 million is from private insurer Aung Thisar Oo Co.
The Htoo Group is controlled by Burmese tycoon U Tay Za, who was closely linked to Myanmar’s former military regime.
The total amount of indemnities payable for Kandawgyi Palace Hotel have not been disclosed yet cannot be disclosed as the extent of the damages on the buildings are still under inspection.
“We can’t say what the amount of indemnities to be paid is yet. If a building is completely damaged, the payable amount will be for the whole building as per the value of the building. If it is partially damaged, the compensation will be proportionate,” U Lwin Oo said.
“We will pay indemnities for the hotel as soon as possible. If a whole building is burnt down, the payout will be simple and fast. But if it is partially burnt down, it has to be repaired. Under thess circumstances, the hotel will claim insurance for the repairing, which takes time to calculate,” U Lwin Oo said.
Kandawgyi Palace Hotel is a five-star hotel which is built mostly from teak wood. It took firemen more than three hours to extinguish the fire at the hotel.
It is the largest fire disaster involving a hotel in the 60 years Myanma Insurance has been in business. Prior to the Kandawgyi Palace Hotel fire, only small-scale fires involving machineries took place in hotels, U Lwin oo said.
The fire underscores the importance of owning insurance in Myanmar, where insurance cover is much lower than in neighbouring countries. It also comes as insurers look forward to the liberalisation of the local insurance sector, under which private and foreign firms will be able to participate alongside Myanma Insurance in the market.
Plans to reform the insurance sector were first announced in 2012. However, the industry has yet to see any significant change in the market since then.
Source : Myanmar Times
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