As the rain fury abates and the flooding starts to recede in Kerala - ravaged by the worst monsoon in close to a century - the insurance industry braces up for a deluge of claims. According to The Economic Times, insurance companies have started receiving claim intimations from the state, which has witnessed massive loss of life and property damage in the past few weeks.
"Looking at the initial claim intimations, we expect claims under general and life insurance to touch Rs 500 crore," an executive of a public sector insurer, told the daily. In a similar vein, a New India Assurance executive claimed that the company has received 65 claims worth Rs 35 crore in the first round of intimations and another 110 claims are expected in the second round. Several of these people, who have already initiated claims, are on vacation in Malaysia and have made the claims through emails. "We expect more people to file once they go back from relief camps," he added.
Depending on whom you ask, 6-8 lakh people are stuck in 3,000-5,000 relief camps set up across the state. The death toll has crossed 300 and Kerala Chief Minister recently pegged the overall damage caused in the state at over Rs 19,500 crore. That's just the initial assessment. Insurers expect more claims to come after the water recedes from worst affected areas such as Thrissur, Chengannur, Ernakulam and Kuttanad.
Then there is the loss on the agriculture side. The floods and landslides have wreaked havoc on the plantation sector in the hilly regions of the state, which produces spices, rubber and tea. Consider Idukki, once known as the spice capital of the world and currently one of the worst-affected districts in Kerala. Ajit BK, secretary of Association of Planters of Kerala, told PTI last week that the loss suffered by tea, coffee, cardamom and rubber planters due to the rains since the onset of the South West Monsoon on May 29 was pegged at Rs 600 crore.
The regulator has also asked the non-life as well as standalone health insurers to widely publicise details of offices/special camps set up for the purpose of claim settlement. "In order to gauge the magnitude of the loss, all non-life insurers (including standalone health insurers) are advised to submit information relating to insurance claims in Kerala on a daily basis," IRDAI announced last week.
This is not the first time that excessive monsoons will hurt insurance companies. In fact, floods have caused the biggest catastrophe losses to insurers in the past 13 years. Claims from the 2015 Chennai floods were the highest for the general insurance industry at over Rs 5,000 crore, followed by the Mumbai floods of 2005 (Rs 4,000-5,000 crore) and the Jammu & Kashmir and Uttarakhand floods, at about Rs 2,000 crore each.
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