Cyclone damage leads to

Business

Fair weather friends

Cyclone damage leads to a review of building standards

By Ulafala Aiavao

WHEN times are good, insurers can allbrd to offer a range of services on the premise that a few damage claims will not swamp their reserves.

But a few major disasters, especially in the small Pacific Island states can cripple insurers.

In Western Samoa, the major prop erty insurer, National Pacific Insurance, enjoyed a long period of relatively fair weather as far as cyclone claims were :oncerned.

But NPI, operating in Western iiamoa. American Samoa, Tonga and Vine, was tested in its tenth year of iperation when Cyclone Tusi caused noderate damage in American Samoa.

Then came Cyclone Ofa in February 990 resulting in claims from all four sland countries where NPI had clients, n Western Samoa, Ofa claims were ibout WSSIO million (USS4.I million;.

In December 1991 Cyclone Val vreaked further havoc. The National Disaster Council estimated Val-related lamage at WSS7I3 million (USS 292

nillion), nearly half of it involving

•uildings and dwellings.

NPI, and overseas companies which •ear some of the cyclone risk through re isuring the coverage, were fortunate hat relatively few properties were isured.

Its exposure to Val claims was about VS$2O million (USSB.2 million) -slightly higher than Western Samoa’s Dtal export earnings last year.

With about 1000 policies covering rivate homes, and about the same umber in the corporate sector, NPI is

now refusing re-newing them as they

expire. Clients can only re-new their policies if they pay higher premiums and, more importantly, if they can come up with an engineer’s certificate stating their building is cyclone-resistant, i.e. it can withstand windspeeds of up to 123 miles an hour. Shortly after Val, Prime Minister Tofilau Eti Alesana criticised the shoddy workmanship in many damaged or destroyed homes and the Public Works Department began look ing at a building code. (NPI bases its assessments on Fiji standards).

When New Zealand carpenters came to help repair a number of Samoan schools damaged by Val, they found concrete walls with no reinforcing steel.

Timber structures had little bracing and roof purlins were either too far apart or had too few nails.

The impact of NPI seeking stricter standards for cyclone cover has a flow on effect in other areas.

Lending agenciess have an interest in

ensuring buildings they fund can attract

insurance cover.

With community facilities such as schools, most of the general labour usually is provided by the village, not the builder.

NPI and engineers estimate an aver age home can be strengthened for an

Extra Wss2,Ooo-Wsss,Ooo (Ussboo To

U 552,500).

The added investment, representing three to five per cent of the total construction cost, is cheaper than trying to rebuild the entire house.