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Journalism of Courage
Indian reinsurer General Insurance Corporation GIC, together with other nationalised general insurance majors, are expected to be hit hard by the massive devastation caused by the tsunami in South Asian countries like Indonesia, Sri Lanka and Thailand. This is over and above the claims being faced by them on account of the damage done by the tsunami in India.
In contrast, major global reinsurers have said one of the worst natural disasters in modern history would not burden them much as the majority of the losses in India, Sri Lanka, Thailand, Malaysia and the Maldives were not insured at all. However, GIC is a leading reinsurer in the South Asian region, with substantial exposure in countries like Indonesia, Sri Lanka, and Thailand.
The business of reinsurance is a two-way process: while Indian risks get shared by other countries through reinsurance arrangements, risks from other countries also are shared by domestic insurers and GIC.
The state-owned reinsurer, in recent times, has been aggressive in insuring South Asian risk, and is getting ready to settle claims relating to the tourism, marine and industrial sectors.
8220;The largest number of claims for the corporation will come from Sri Lanka where it has exposure for large industrial properties,8221; admitted a senior official of the corporation.
The corporation is also expecting large tourism and marine-related claims from Indonesia and Thailand.
The sheer size of the disaster and the absence of historical data make it difficult to provide an exact estimation of the damage, particularly as information from the affected areas is still scarce. However, the claims cost for the insurance industry will be in sharp contrast to the human and economic losses triggered by this event as insurance penetration in the coastal areas of the affected countries and the concentration of value is comparatively low.
