Kerala floods impact: Insurance companies receive over Rs 1,500 crore in claims

By: | Updated: September 13, 2018 12:28 PM

Pinarayi Vijayan, the chief minister of Kerala, had earlier said that total loss and damage to the state due to incessant rains/floods is expected to be more than earlier estimated Rs 20,000 crore.

Most of the claims filed by the flood affected people have come from property, resorts, automobiles, restaurants and small units. (Reuters)

Though insurance companies escaped with minimum claims as most properties, especially houses and crops were not covered for insurance in Kerala, which was hit by severe floods causing massive destruction of properties and lives, the insurance industry has received total claims worth Rs 1,500 crore from Kerala flood victims. Most of the claims filed by the flood affected people have come from property, resorts, automobiles, restaurants and small units.

“Total claims have crossed over Rs 1,500 crore. All these claims may not result in cash payout,” The Indian Express reported quoting a chief executive officer of an insurance firm. State-run United India Insurance, which is the most active insurance firm in the state, got the biggest chunk of claims as it has to shell out about Rs 700 crore to flood victims.

KB Vijay Srinivas, General Manager and Director of United India Insurance, told the paper that the company is processing all the claims it has received, of which over 4,000 claims are just from vehicles owners.

Last month, Insurance Regulatory and Development Authority of India (IRDAI) also issued guidelines to take immediate actions and settle all life insurance claims related to Kerala floods. It also asked the insurance firms to streamline the claim process for the same to mitigate the hardships of the flood-affected people.

Pinarayi Vijayan, the chief minister of Kerala, had earlier said that total loss and damage to the state due to incessant rains/floods is expected to be more than earlier estimated Rs 20,000 crore.

So, if the total insurance claims on account of flood are at about Rs 1,500 crore, it is just approximately 7.5% of the total loss to the state and shows a poor insurance penetration in the country. While, flood insured losses in J&K were reported at about 6.5% of the total loss, insured loss in cyclone Hudhud-hit Andhra Pradesh amounted to nearly 7.5% of the total loss, in 2014.

In other countries, insurance penetration is much better. According to Prudential Insurance Brokers, the proportion of insured losses to overall losses in US in May was 75%; the proportion of insured loss was 52.5% from Winter damage in Japan in February 2014 and 80% across Western Europe for severe storm damage in June 2014.

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