Insurers to pay Mahshar fire damage claim

Primary estimations show that the massive blaze that ravaged Bou Ali Petrochemical Complex, located in the southern Mahshahr Port, has caused about €60 million in damages, an official at the Iran Insurance Company said Saturday.

“The complex is fully covered by a consortium of domestic insurance companies and losses will be compensated soon after the extent of the claim is calculated,” ILNA quoted Mohammad Rezaee, head of the fire insurance department at the IIC, as saying.

Iran Insurance Company, as the agent insurance company of the consortium that covers the huge industrial complex, sent a group of experts to the port to determine loss caused by the fire in Bou Ali Sina Petrochemical Complex, soon after the fire broke out on Wednesday.

It was almost put out Thursday, but a second fire erupted, prompting the firefighting crew to battle the biggest conflagration in Iran’s petrochemical industry in recent memory.

However, it was announced that the fire had been contained in the wee hours of Saturday. The cause of the fire is still unknown, but it was likely caused by the leakage of paraxylene, a highly flammable hydrocarbon. The fire caused no fatalities, but nine people were reportedly injured.

Claim Ceiling

“This is the biggest loss in country’s petrochemical industries ever,” Rezaee said. “Last year we paid a total loss of €4 million over an accident in Marvdasht petrochemical complex in Fars Province.”

A group of 11 local insurance companies are covering the petrochemical complex under a general liability policy. “SCOR, a French insurance company, was covering the complex until 2010,” Rezaei added.

“Insurers are obliged to cover claims of up to €500 million,” according to Bou-Ali Sina Petrochem Complex statement on Saturday.

IIC, the only state-owned insurance firm, is supposed to foot 60% of the damage bill. Asia Insurance and Alborz Insurance each account for 9% of the loss. The remaining will be compensated by Dana Insurance, Karafarin Insurance, Mellat Insurance, Parsian Insurance, and Saman Insurance. Day Insurance, Mihan Insurance and the IIC affiliate Iran Moein Insurance are said to be the other members of the consortium.

Mellat Insurance announced on Saturday that it would pay 5% of the total claim through its technical reserves adding that the fire will not impact the company’s annual revenues.

Iran expects most units at its Bu Ali Sina petrochemicals complex to resume operations within three weeks, after the fire was extinguished early on Saturday, Oil Minister Bijan Zanganeh was quoted as saying by his ministry’s website, Shana, on Friday.

Mahshahr Special Economic Zone is a key industrial zone on the southern flank of the oil province of Khuzestan, where a chain of petrochemical plants are located.

By Financial Tribune