Insurance companies lose Rs 1,300 crore in Gujarat cyclone

MUMBAI, JULY 3: Insurance companies have taken a hit of Rs 1,200 to Rs 1,300 crore due to the recent cyclone in the western region of Gujara...

MUMBAI, JULY 3: Insurance companies have taken a hit of Rs 1,200 to Rs 1,300 crore due to the recent cyclone in the western region of Gujarat, D Sengupta, chairman of General Insurance Corporation of India (GIC) said here on Friday.

Speaking to newspersons, Sengupta said as the insurance companies have taken a re-insurance cover with the international insurance companies, the loss to the GIC and its four subsidiaries would come down drastically. "We will be able to recover about Rs 800 crore from the international companies," Sengupta said.

GIC’s net cost outgo of funds towards insurance claims made by people affected in the recent Gujarat cyclone would only Rs 200 crore out of total claims made to them, he added.

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The devastating cyclone in Kandla and surrounding area had crippled the trade and industry in the region. Two new refineries, constructed by Reliance Industries and Essar Group have together lost around Rs 350 crore, as per the preliminary estimates. Reliance has already moved a claim of Rs100 crore with Oriental Insurance.

Though the Kandla Port Trust has not having an insurance cover, most of the claims are being made by the salt manufacturing companies and exporters who lost heavily. Gujarat Electricity Board (GEB) was one of the main loser as the cyclone twisted and felled hundreds of massive power transmission towers. The GEB alone has lost around Rs 1,000 crore. Besides, the entire region’s telephone poles have been razed to the ground by the cyclone which killed over 2,000 people.