Recurring natural calamities to escalate insurance premium
The growing concerns over the increasing natural calamities in the east coast of India is leading the general insurance players to look at increasing premium rates for properties, commercial establishments, factories and others which are located in the vulnerable areas, according to industry sources. In the last two or three years, these insurers had to field claims worth around Rs 9,000 crore due to natural calamities in this region.
The calamities include cyclone at Vishakapatnam (general insurance claims of around Rs 2,500 crore) two years back, cyclone at Orissa (claims of around Rs 500 crore), flood in Chennai during December 2015 (claims of around Rs 5,000 crore) and cyclone in December 2016 (initial claims of around Rs 1,000 crore) in Chennai.
New India Assurance, one of the top public sector insurers in the region, received around 350 claims worth around Rs 50 crore so far and is expected to receive more claims in the coming days.
Chennai-based United India Insurance said that so far around 250 claims were reported to the company, post the cyclone which hit Chennai last week, with a claim of around Rs 100 crore. The company also expects more claims to come up this week.
An official from the company added that the reinsurance market will be hard for the general insurers, which inturn will lead to increase in prices at the domestic market in these vulnerable area.