Cost of calamity: Insurers likely to face Rs 3,500-cr claims after Chennai floods

Nearly a month after floods hit Tamil Nadu, public sector United India Insurance, which has the biggest exposure to the state, has received over 5,700 claims worth approximately Rs 1,000 crore.

Overall, the insurance industry is likely to face claims of over Rs 3,000-3,500 crore with  large number of claims from property, automobiles and small and medium enterprises (SME) sector.

“We have received 5,739 claims amounting to to around Rs 1,000 crore. The number of claims have come down in the last few days and we believe that major reporting of claims is done. For us out of total number of claims, around 60% of them are in motor insurance while remaining in householders policies and some in SME sector,” said TL Alamelu General Manager at United India Insurance.  However, the official also added that, final numbers on claims will be out in the next few days.

Senior officials in the insurance industry believe that the industry might face claims of over Rs 3,000-3,5000 crore from the devastating floods in Tamil Nadu.

In the past, floods in Jammu and Kashmir and cyclone HudHud cost insurers and estimated  Rs 2,500 crore and Rs 4,000 crore respectively.

SBI General Insurance’s MD and CEO Bhaskar Sarma said that, they have received around 1,200 claims amounting to Rs 120 crore. “Most of the large claims have been reported,  however few claims are still coming in. We have already setteled around 20-25% of claims in the past few days,” added Sarma.

In the past insurance regulator, Insurance Regulatory and Development Authority of India (Irdai) had asked all the insurers to take immediate steps and settle insurance claims due to floods in Tamil Nadu, Puducherry and neighboring districts of Andhra Pradesh. Even General Insurance Council had stated that, companies are taking all steps to expedite settlements with minimum and relevant documents for this purpose.

Sasikumar Adidamu, chief technical officer, non-motor at Bajaj Allianz General Insurance, also said that, his company’s claims stood at around Rs 350-400 crore. “The claims have been stabalized, but what we have received as of now around 50-60% are for motor insurance.