Kerala floods may rank next only to 2015 Chennai event in terms of claims


Public sector general insurance companies expect that the recent Kerala floods would run up a close second to the 2015 Chennai event in terms of the number of claims raised and losses estimated.

AV Girija Kumar, Chairman and Managing Director, Oriental Insurance, said here that public sector general insurance companies expect to see an estimated 25,000 claims being raised in Kerala.

50,000 claims overall

Kumar is also the Chairman of the General Insurance Public Sector Association that represents the four public sector general insurance companies – National, United India, New India Assurance and Oriental. Speaking on the sidelines of an event, he said that counterparts in the private sector too could report as many claims, raising the total number to around 50,000.

Extrapolating this to the likely incidence of losses, Kumar guesstimated that the total figure would be in the region of Rs 4,500 crore, adding the caveat that these are strictly preliminary figures only. “As of today, 13,730 claims have been reported from Kerala to the four public sector general insurers for an estimated Rs 1,242 crore,” Kumar said.

Of this, Oriental Insurance has accounted for 2,051 claims worth Rs 149 crore. It has settled 80 for Rs 0.3 crore. Figures for the four companies together are 302 settled (out of 13,730 reported) for Rs 17.41 crore.

As was to be expected, motor claims beat others by a wide margin with all four companies reporting 7,919 motor claims for an estimated Rs 70.42 crore. They have settled 291 and paid out Rs 14.55 crore to policyholders. The respective figures for Oriental are 79 (out of 1,659 reported) with Rs 0.02 crore paid out.

Insurance density

The striking features that set apart the Chennai event from Kerala’s, occurring as they did between three years of each other, were insurance density/penetration and the geography covered. Both the values were higher in Chennai because the area covered was mostly Chennai city. In contrast, in Kerala, most of the State’s geography, including the rural outback, was affected.

While 302 claims of the 13,730 raised in Kerala have been settled for Rs 17.41 crore as on date, the settlement figures would be less going forward, even if an equal number of claims may be raised. This, according to Kumar, is so because the bigger losses from industrial establishments have already been reported because they are prompt to raise the claims at the first instance.

“So the actual figures of losses should be much less than the estimates. In fact, I won’t be surprised if the actuals add up to no more than 25 per cent of the numbers that we’re discussing now.”

Balwant Singh, Director and General Manager, Oriental Insurance, who was also present, said this would become more apparent if we take damages suffered by the housing sector.

“A presentation made by the State Government mentioned that some 30,000 houses have suffered severe damages. But how many are covered would be very very less since most are in rural areas.”