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May 7, 2019
Insurers are preparing to manage claims arising from an extremely powerful cyclone which battered the eastern Indian state of Odisha on 3 May causing extensive damage to property, vehicles, crops and the loss of at least 56 lives. Several news report have also labelled cyclone Fani as the worst storm in four decades affecting eastern India and neighbouring Bangladesh. Fani is the equivalent of a strong Category 3 storm on the Saffir-Simpson Scale.
A large number of claims are expected for the damage of property, vehicles and hospitalisation while few claims will be for damage to crops. There is also likely to be fewer life insurance claims as the state’s improved disaster-management efforts limited the number of casualties.
However, several insurers note that underinsurance is a major challenge. According to research from Lloyd’s India was found to have an insurance penetration rate of less than 1% with the absolute cost of the insurance gap standing at $27bn.
The Insurance Regulatory and Development Authority of India is expected to issue advisories for claims processing in the cyclone-affected areas. There are no official figures regarding total insured losses arising from cyclone Fani yet.