Insurance companies are likely to take a hit of around Rs 400-500 crore on account of the severe floods in Chennai that led to destruction of properties and claimed many human lives.
While insurers have already received claims worth over Rs 200 crore, the figure is likely to go up in the coming days and touch around Rs 500 crore, insurance sector officials said. Public sector firm United India Insurance alone has received 130 claims worth around Rs 110 crore. New India Assurance has received over 100 claims estimated at Rs 30 crore. Oriental Insurance has received 76 claims from middle-sized business houses and retailers estimated at Rs 37 crore and three losses reported from industrial houses worth Rs 30 crore. More losses are expected to pour in as the water recedes.
“The losses are not expected to be very big and will have no impact on our profitability or balance sheet. While no major impact on prices are expected, this incident will drive home the need for price correction in the light of repeated catastrophe events happening in the Indian market. Risks which are located in low lying areas may see a price increase,” said New India Assurance chairman and MD G Srinivsasan.
“Most of the losses reported to us are from the retail segment. Property losses from mid-size business houses are still pouring in. There is not much industrialisation in Chennai city and most of industrial activities are happening in the peripheral limits outside Chennai, Cuddalore and Neyvelli districts besides Pondicherry UT,” said an official of Oriental Insurance. Insurers are also expecting claims for damages to motor vehicles but they say the amount is likely to be small.
Insurance companies suffered losses of over Rs 4,000 crore in two natural disasters — Jammu & Kashmir floods and cyclone Hudhud in Andhra Pradesh and Orissa — that wreaked havoc last year. While Jammu & Kashmir floods have led to insured losses of around Rs 1,500 crore, the losses due to Hudhud are estimated around Rs 2,500 crore.
‘Also expecting claims for vehicles’
* United India Insurance has received 130 claims worth around Rs 110 crore
* New India Assurance has received over 100 claims estimated at Rs 30 crore