December 8, 2015
The heaviest rainfall in over a century to hit the southern state of Tamil Nadu has caused massive flooding and increased sharply estimates of losses by insurance companies to more than INR20 billion (US$300 million)
The heavy rain started around 8 November and insurers last month had estimated that losses could reach INR5 billion. Given that the rains are expected to continue, the insurance industry is anticipating a spike in claims.Insurers are expecting a large number of claims from automobiles, property, factories and small and medium enterprises, reported the Hindu Business Line. Chennai-based government-owned insurer United India Insurance is anticipating major claims after the floods, reported the Hindu Business Line. It is said to have the biggest exposure to the disaster as it is based in the state. “We have already received claims of around INR3 billion, and after major flooding since Tuesday, we are expecting more losses. We expect to see major losses in householders, shopkeepers and motor insurance policies as most vehicles are under water,” said Mr Milind Kharat, Chairman and Managing Director of United India Insurance.
Mr G Srinivasan, Chairman and Managing Director of New India Assurance – the country’s largest general insurer – said that the company had received claims worth INR1 billion following floods in Tamil Nadu in November. And after the severe flooding this week, the quantum of claims is expected to mount. Insurance industry officials said most insurers are still in the process of receiving loss estimates as surveyors have not been able to visit the affected areas and most employees have not been able to reach their offices. The floods have caused massive business disruptions with factories and offices shut down. Chennai, India’s fourth most populous city, is a major auto manufacturing and IT outsourcing hub. Airlines have suspended flights into Chennai’s flooded international airport which was closed down. Insurers last faced heavy losses from floods in September 2014 in Jammu and Kashmir in northern India that cost an estimated INR24 billion in claims.