Even as India expands it cities and bolsters infrastructure, it is simultaneously climbing on the risk map with more perils anticipated.
Natural topography is changing along the way, causing flooding, and this is just one example of how new perils are evolving.
Global insurance giant Allianz SE has placed India among the Top-10 countries worldwide on peril ranking for natural catastrophes. India is clubbed with countries such as The Philippines and Japan, where the severity of natural disasters is very high. “India will be quite high on the peril ranking list because of quakes, floods and cyclones,” said Mark Mitchell, regional CEO, Asia, Allianz Global Corporate & Specialty SE.
Allianz, which had earlier created a model for earthquakes in India, is developing one for floods, and this was driven by the Mumbai floods, Mitchell said.
The exposure to floods in areas where there is a large concentration of corporates, industries and manufacturers is an area of concern for insurers.
Mitchell said it would be difficult to develop a model on flooding based on historical data as there is also the impact of climate change to deal with. “Quakes and storms are much more predictable,” says Mitchell.
But awareness of insuring against such eventualities is dismal in India and barely 1% of the population is covered, says Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance Company, a JV between Allianz SE and Bajaj Finserv.
“Episodes of natural disasters in Uttarakhand and Jammu & Kashmir, and the recent earthquake in Nepal create awareness for a week, but people are back to normal after that, thinking it will never happen to them,” says Singhel.
After the Nepal quake, the company sent SMSes to 1 lakh people, sensitising them on protecting their property, but only a dozen responded, Singhel said.