Tune Insurance shares dumped:Forget the QZ 8501 conspiracy theories, and listen carefully to what Tony Fernandes has had to say.....

A week before QZ 8501 went down  AirAsia "group chief executive officer"  Tony Fernandes' investment vehicle Tune Group Sdn Bhd  sold a total of 944,800 shares in Tune Insurance Holdings Bhd.
That disposal has led to a slew of conspiracy theories, and probably best treated as such.However, Fernandes has since the crash made some interesting statements which may well explain the reasons for the disposal and provide  some insight into Tune Insurance's medium to long term prospects.
Immediately after the crash Fernandes told reporters that climate change may have been the cause.

As he put it :
"There's a lot of rain, so that is something we need to look at carefully because the weather is changing. The weather is changing.

At this point, readers are reminded of the  duty  of disclosure of all risks, that underlie  any type of insurance contract:


Insurers need information from consumers to decide whether to offer (and renew) insurance, and to decide the price or other terms of the insurance to be offered to the consumer. The law imposes a duty of disclosure on policyholders when they seek to take out new insurance cover or to renew existing insurance cover.

Insurers may be able to refuse to pay a claim or part of a claim under an insurance policy if the policyholder has not complied with their duty of disclosure. However, an insurer must first establish that:
Insurers may be able to refuse to pay a claim or part of a claim under an insurance policy if the policyholder has not complied with their duty of disclosure. 
Fernandes' assertion, indeed insistence, that the weather is changing begs the question; did AirAsia inform its insurers ,including Tune Air, that the "weather is changing", ie that the environment in which it operates, is changing?
Did Fernandes' disposal of Tune Insurance shares have anything to do with a realization that the bad weather was likely to cause mishaps which Tune Air might have to carry on its own, and which its re-insurers would not indemnify for failure of disclosure?
In addition, and quite apart from the above, has Fernandes' attempt to blame the QZ 8501 crash on changing weather provided AirAsia's insurers and re-insurers a way out of any obligation of indemnity?
END 

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