The insurance firms are mulling tariff increase for insurance policies issued against riots, strikes, and fires, anticipating Rs8--Rs10 billion compensation claims on account of huge losses suffered by industry, businessmen, car owners and bankers during the four-day street turmoil following Ms Benazir Bhutto’s murder on December 27.

After the situation normalised, the Insurance Association of Pakistan (IAP) met on January 1 to assess the immense losses to their clients. Initial estimate of losses in Karachi alone are of more than Rs4 billion on the assumption that 300 cars were burnt fully while about 1,500 were burnt partially or damaged. Property worth Rs2.5 billion was destroyed in fire while marine cargo valued at Rs500 million was destroyed in transit.

‘These figures do not include motor cars and vehicle losses and also of property outside Karachi’’ a top executive of one of the leading insurance company informed this scribe. He feared that in the final count, the total losses may go up to twice as high as estimated initially.

In his address to the nation on Wednesday, President Pervez Musharraf put total losses at Rs100 billion indicating the magnitude of the catastrophe that hit the people in Sindh and Punjab.

However, the initial estimate of Rs100 billion losses include Rs50-60 billion suffered by Pakistan Railways as rioters attacked more than two dozen railway stations, destroyed large rail tracks and damaged many other installations at various places in Sindh and southern Punjab. There are reports of cash being taken away from many railway stations. For decades, the Railways has been operating without any insurance cover.

For the last few years, the public sector National Insurance Company Limited has been trying to offer various policies to Railways to cover the damages-- losses of its roll and stock and of cargoes as well as of casualties-- being suffered in a few accidents every year.

“Neither the minister of Railways or any top bureaucrat responded positively to our offers,’’ confided a senior executive who was apparently feeling relieved as the company was spared from paying huge compensation for losses in case of insurance arrangement with the Railways.

The National Insurance Corporation (NIC) officials anticipate claims from more than 50 branches of National Bank of Pakistan and First Women Bank that come under insurance over given by them. ‘’No NBP branch in Karachi has reported loss of much cash as vaults were pretty fortified and no one could enter safe room’’, a senior official said. He said that NBP may seek compensation for damages to its furniture and some of the fixtures and of course, for the loss of cash.

As it now emerges, the large scale spree of arson, looting and damages due to horrific rioting has put private general insurance companies under tremendous financial strain. Three main companies-Adamjee, Eastern Federal Union and New Jubilee Insurance-share the biggest chunk of business and obviously would receive big claims. ‘’The big companies will somehow sustain these losses but the real crunch will come on small companies and their minor losses will look big in ratios’’, says an insurance executive.,

“But I assure you that no insurance company will collapse under the pressure of these claims, which no doubt are going to be the highest in any single year, and may cause some problems’’, a top executive pointed out. He ruled out any possibility of seeking financial help from the government. ‘’Of course, we will talk to the government to offset any future shock of such nature’’ he said.

While people suffered from the sudden outbreak of rioting and total collapse of law and order machinery in Sindh and Punjab, businessmen are probably worst shaken. ‘’Imagine 1,500 trailers carrying transit import-export cargo being damaged, looted and burnt down on the highway,’’ Shamim Ahmad Shamsi, President, Karachi Chamber of Commerce and Industry (KCCI) said. The KCCI has set up a Help Desk to assess the losses suffered by businessmen and shopkeepers.

“We, in Lahore, were wondering at the fragile nature of our security system that is not even able to protect the overland transport and trade arteries linking us with the biggest port city “ a business leader in Lahore informed Dawn on telephone. With communication links disrupted, businessmen were worried about piling up of inventory of their products in factories. While much to their relief the transport link has been restored, the businessmen in Karachi and upcountry are still haunted by the possibility of a breakdown in future.

The industrialists in Sindh were stunned by the burning down of more than 22 factories by rioters. ‘’It never happened before that factories were attacked and people burnt alive,’’ a leader of Korangi industrial area said. Factories in Korangi, North Karachi, Kotri, Gharo, Nooriabad and some other places were attacked and machinery was damaged and both products and raw materials looted.

“Many such factories like Colgate, Masco Exports, Sunflower and a few others were almost gutted to ashes causing huge losses, ‘’ an industrialist said. Other factories like Clariant, Novartis Pharma in Jamshoro, Color Ital and BASF in Landhi Korangi were severely damaged.

“For the first time, as many as 500 bank branches including 50 ATMS were burnt down,’’ a multinational reported back to its principal office in Europe. On January 1, about two dozen businessmen met Sindh Governor Dr Ishraul Ibad. Also present in the meeting were top officials from all law enforcing agencies. They opened their heart to tell the Governor and senior law enforcers of their sufferings on December 27 evening. ‘’Never before we felt so insecure and vulnerable as it was that fateful evening’’, a former President of Karachi Chamber of Commerce and Industry said.

But then from the Governor House meeting emerged a positive proposal. The Governor named Sindh caretaker industries minister, chairman of a committee that will suggest setting up of security hubs around half a dozen industrial areas on public-private partnership basis. ‘’I will co-opt a few members in the committee to draw up proposals with consensus’’ Arif Abbasi, the caretaker provincial Industries minister confirmed.

The proposal came only after businessmen offered to pay for the salary and upkeep money for a force of 300 policemen to protect factories. ‘’If this proposal gets going, we will consider extending it to commercial areas’’, a participant of the meeting said.

A feeling of growing insecurity reportedly forced some businessmen from Karachi to buy property worth about Rs5 billion in Dubai in those four days which literally shook Pakistan.