Insurance cos brace for quake claims
Indian general insurers are bracing for huge claims from quake-ravaged Gujarat, which has one of the highest insurance coverages in the country, senior industry officials said on Friday.
"The exposure to Gujarat is high... I expect all kinds of insurance to be affected," an official at state-run reinsurer General Insurance Corp said.
The GIC official said that the company was already in touch with its own reinsurers overseas for cover against claims it will face.
General insurance is dominated by GIC and its four subsidiaries -- New India Assurance, United India Insurance, National Insurance and Oriental Insurance.
Gujarat accounted for Rs 8 billion in annual premiums, or about 8 per cent of India's total general insurance business in the current year, said K N Bhandari, chairman of the United India Insurance Co.
India's second most-industrialised state was hit by the country's worst earthquake a week ago. The quake measured 7.9 on the Richter Scale, killed at least 30,000 people and left many more homeless.
Initial estimates from the Gujarat government have put damage at about Rs 100 billion.
The Union government announced fresh taxes on Thursday to raise Rs 13 billion for rebuilding. India has sought $1.5 billion in extra help from the World Bank and the Asian Development Bank.
Clear picture awaited
General insurers are awaiting a full assessment of the damages.
"Estimates are very difficult to give at this point of time, because information is still trickling in from areas which have been devastated," Bhandari said.
He said the four companies had so far received 4,000 intimations relating to property damage and the cost of the claims was yet to be calculated.
New India Assurance, which focuses on India's western region, expects around half of all claims to be on its accounts, a senior official said. "We are expecting huge claims," he added.
United India's Bhandari said they could also expect substantial claims from the Gujarat government for policies it had taken out for poor farmers.
The GIC official said the reinsurer was constantly monitoring data from its subsidiaries. "It is a very slow process," he added.
GIC predicted that a lot of claims would come from small industries, which bore the brunt of the quake in the business community.