05.14.2001
Non-life insurance companies burned by fire at Eastern Science Park

• A fire which raged for 40 hours has wrought NT$6.0b worth of damage at the Eastern Science Park outside Taipei. Insurance claims have already been filed and non-life insurance companies, both domestic and foreign, will have to foot the bill. Particularly badly affected by the fire were Tuntex Group and Acer Group. These Groups respectively hold NT$3.8b and NT$2.0b fire insurance policies.

• Local insurance companies Fubon Insurance (2817 'Fu Bang Bao') and Union Insurance (2816 'You Lian') are reviewing claims. However, losses will be limited through reinsurance against other insurance companies.

• VB Primasia Investment Opinion: As around 50% of Fubon’s fire insurance expense is reinsured, we expect claims will amount to around NT$300m. While such a payout does not threaten solvency, we expect share price performance to be adversely affected in the short term. We maintain a HOLD on this counter.

WilliamFong@Primasia.com +886-[0]2-2547-8864