Terror pool sufficient to meet claims, says GIC

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: Though it is quite early to estimate the size of insurance claims that will come from Taj Mahal Palace and Tower, and Oberoi-Trident, the hotels in South Mumbai that were devastated by terror attacks last week, General Insurance Corp expects the current corpus of terror pool to be sufficient to meet the claims.

According to a senior official of GIC, the designated re-insurer of the country, total funds available in the pool is about Rs 1,300 crore.

“Though it is too early to measure the extent of the damage, we think, with a corpus of Rs 1,300 crore, all the claims will be settled,” the official said.

Till date, total claims settled from the pool stood at a mere Rs 10-15 crore.

This is the first time since the pool’s inception that huge outflows are expected.

“The corporate sector was not affected in a big way in previous terror strikes. Hence, a nominal outflow was made from the pool,” an industry official pointed out.

GIC has been mandated to manage the pool, which was set up by all Indian general insurers after 9/11 attacks in the US. As all the insurers have contributed to the pool, the loss will be borne by the entire industry.

While Taj Mahal Palace and Towers is insured by Tata AIG, Trident-Oberoi hotels are insured by state-owned New India Assurance Co.

Both the insurers have appointed a group on Friday to survey the extent of the damage and estimate claims. Their estimates are expected to be detailed by the end of this week.

The GIC official, however, said, if the claims are on the higher side, then there will be a need to increase the premium for terror cover to replenish the pool. Insurance Regulatory and Development Authority’s approval will be required to increase the premium for the pool.