Insurance claims for damage to property, automobiles and other goods following the devastating floods in Tamil Nadu could rise to well over Rs 1,000 crore, general insurance companies estimate.
While the earlier deluge in the state, which started on November 8, has already resulted in claims of around Rs 500-600 crore, the recent torrential rains could cause far more damage, insurers point out. The public sector United India Insurance has the biggest exposure to the state. The floods in Jammu and Kashmir in September 2014 cost insurers an estimated Rs 2,400 crore in claims.
M Ravichandran, president (insurance), Tata AIG, observed that given the claims value is already estimated at Rs 500 crore or so, the total after the second phase of the floods could cross Rs 1,000 crore. “While it is hard to say, the second deluge could be far worse because of the water being discharged from the reservoirs,” Ravichandran explained.
Tata AIG has so far received claims for an approximate R30 crore across roughly 100 claims for motor and property insurance.
SBI General Insurance MD & CEO Bhaskar Sarma told FE his firm had received claims worth R50-55 crore.
“These claims relate to damages that have taken place till Tuesday. Given the rains are expected to continue, we’re expecting a spike in claims,” Sarma said. The insurer has already despatched a team from Mumbai since its executives in Chennai are unable to operate and is advertising on radio channels to assist customers with their claims.
Bhargav Dasgupta, MD & CEO, ICICI Lombard, said the maximum damage would be to property such as factory buildings including that of SMEs. Insurers pay for the loss of revenue. “There will also be claims for damage to automobiles,” Dasgupta noted. At his company, claims have touched Rs 40 crore.
Ritesh Kumar, CEO and MD, HDFC Ergo, told FE that close to 350 claims, primarily from individuals, had been received, involving an amount of Rs 30 crore. “The number is likely to be significantly higher than the current estimate of Rs 500 crore,” Kumar added.
Given the very low penetration of insurance in the household goods sector of less than 1%, there will be very small claims against the damage of such goods.
Among the private sector insurers that have a bigger exposure to the southern part of the country are Cholamandam MS General Insurance and Royal Sundaram Alliance Insurance.