The impact of the two major floods has been felt across businesses and individuals. Factories, godowns, shops, vehicles and homes have been affected, especially those in low-lying areas. The economic loss is immense from the point of view of loss of assets, drop in productivity and loss of lives. Given the penetration of asset insurance, insurable losses would form a reasonably high proportion.
What will be nature of claims the general insurance industry will be receiving from these kinds of natural disasters
Damage and total loss of motor vehicles, flooding of ground floor homes and bungalows, damage to assets in shops and stocks in godowns, machinery and loss of profit for businesses - these are the major types of claims that the general insurance industry will be receiving due to the impact of floods.
Do you think corporates and households are still unwilling to take insurance cover against natural disasters like flood and earthquake
There will always be some corporates and households who may not take such covers; however, as awareness about general insurance grows, their numbers will keep decreasing. The entry of the private sector serves to increase activity levels in the industry, resulting in heightened exposure to the category for the general public. There is also a drive to constantly upgrade products and services to remain competitive resulting in wider choice for the end customer.
Are corporates now adopting better risk management practices in their day- to-day operations of their plants and functioning of companies
During the last few years, the number of catastrophic disasters such as earthquakes and floods has increased. Insurance can make good the loss, but prevention is always better than cure. Corporates are increasingly realising this and are moving towards stronger risk and disaster management processes.
How do you see the ONGC fire disaster Could it have been avoided by adopting better risk management What kind of claims can one expect from this fire calamity
While risk management processes will be continuously refined with learning from each event, accidents can always happen, since machine and human error would never be reduced to zero. What is also important is how one reacts to control the immediate effects of a disaster, and that is where the role of disaster management becomes increasingly important to mitigate the losses. Claims from the ONGC incident will primarily be for loss of assets due to fire.
Will insurance and reinsurance companies hike their rates after terror events in London and floods and the ONGC event in India
These events will have some impact on the rates.
What has been the response to your weather insurance Is it catching up
We have had a very positive response to our weather insurance product and we are now also selling it in an over-the-counter format. We have already covered over 1.5 Lakh farmers for a range of crops.