Insurance companies have received around 50,000 claims amounting to Rs 4,800 crore on account of the severe floods in Chennai that led to destruction of properties and claimed many human lives.
While most of the claims have come from property, automobiles and small and medium enterprises (SME) sectors, this is the biggest insurance claim from a natural disaster in recent times, said the senior official of an insurance company. “Chennai floods will drive home the need for price correction in the light of repeated catastrophe events happening in the Indian market. There is not much industrialisation in Chennai city and most of industrial activities are happening in the peripheral limits outside Chennai, Cuddalore and Neyvelli districts besides Pondicherry UT,” said an official.
Speaking at the 17th annual Ficci insurance conference, IRDA Chairman TS Vijayan said, “despite claims being high, industry has settled the claims very well. We are still monitoring the situation and few days ago we had a meeting with the stakeholders from the Chennai market on the issues.”
Insurance companies suffered losses of over Rs 4,000 crore in two natural disasters — Jammu & Kashmir floods and cyclone Hudhud in Andhra Pradesh and Odisha — that wreaked havoc in 2014. While Jammu & Kashmir floods have led to insured losses of around Rs 1,500 crore, the losses due to Hudhud are estimated around Rs 2,500 crore. “All these claims were settled,” said an official.
Flash floods in Uttarakhand took 5,500 lives and cyclone Phailin led to huge losses in 2013. When the cyclone Hudhud hit Andhra Pradesh, insured losses amounted to just 7.5 per cent of the total loss. J&K flood insured losses were just 6.5 per cent of the total loss.
In comparison, the proportion of insured losses to overall losses was 52.5 per cent for winter damage in Japan in February 2014, 74 per cent for storm damage in USA in May, and 80 per cent for severe storm damage across western Europe in June 2014, says Prudential Insurance Brokers.
According to a preliminary report by Swiss Re, the total economic losses from disasters is expected to reach $85 billion by the end of 2015. Of that total economic losses incurred, natural catastrophes have caused $ 74 billion in losses and man-made disasters, the remaining $11 billion. It says, approximately 26,000 people died in such events in 2015, double the amount from 2014. Meanwhile, the insured losses from such events was estimated at $ 32 billion in 2015 from $ 35 billion in 2014.