The film industry looks for risk cover

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: Bollywood wasn’t serious about insurance until the winds of corporatisation blew in eight years ago. When film-making got industry status in 1998, and production houses lined up for bank finance, banks had insisted on corporatisation and risk insurance. And film insurance created a buzz after Subhash Ghai insured his Taal for Rs 12 crore the same year. But insurance never gathered much momentum in an industry notorious for its opaque operations, underhand deals and underworld connections. Even now, only a minuscule sum is insured in the Rs 20,000-crore industry.

But that is likely to change post-26/11. Producers and filmmakers have woken up to the challenge terrorism poses to their operations—a prime concern being the safety of celebrities and the vulnerabilities of prime locales. As more production houses seek to cover their risk, this year would see a couple of changes in the insurance space. One, the premium for underwriting film insurance cover would go up—now it is 2-2.25% of a film’s budget. Second, more players will join the industry.

Now, only two non-life insurers are aggressively into the film insurance business: the Chennai-based state-run United India Insurance and the Pune-based private sector insurer, Bajaj Allianz General Insurance. But ICICI Lombard and Reliance General Insurance are poised to enter film insurance. Soma Sekharan, CEO, Reliance General Insurance, says the company is in the process of filing an application before the regulator, IRDA, for launching film insurance products. “Film insurance is picking up now”, says.

Most big film production houses claim that every film being released from their stables are fully covered by insurance. We are thinking of players like Reliance Big Entertainment Ltd (RBEL), Eros, Percept Picture Company, Shemaroo and Mukta Arts. Big Pictures, a part of RBEL, has a whole lot of films on its slate for 2009 release and interestingly all of them are insured, including Luck by chance, 13B and Sikander. Says Mahesh Ramanathan, COO, Big Pictures: “The premia for underwriting a film project may go up. Still, we are ready to insure all our films as usual.”

TV channels too are now more serious about risk cover. Some are insuring not only their studios but also their frontline staff like reporters and lensmen.