Our company exported straw products to a European ...

Our company exported straw products to a European company on CIF basis with payment by L/C. As contracted, we insured with PICC against AR. The goods were shipped within the contracted time at the named port. With the B/L issued by the shipping company, we got payment from Bank of China through negotiation. The next day, we were notified by the importer, “The vessel was caught in fire at sea and all the goods had been burnt. You'd better claim compensation for the loss with PICC, otherwise we had no choice but to ask for refund.” How to deal with this case？