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Enormous Losses Incurred in Cyclone Hudhud Leads to Huge Insurance Claims
- DetailsWritten by PolicyBazaar -
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Modified 17 October 2014
The devastating effects of Cyclone Hudhud are quite evident in the Indian states of Andhra Pradesh and Orissa with the insurance claims all set to cross the INR 4000 crore marks! According to public-sector insurance senior executives, the highest numbers of claims are likely to come from Vizag where the severest fallouts have been noted. Here both the naval base and the commercial units have sustained a high degree of damage.
Initial estimates, point towards an extremely high claim in the range of INR1800 crore to INR 2000 crore. The same situation haunts the crop insurance companies, which are also grappling with similar claims expected to rise up to INR 2000 crore mostly from farmers in the coastal Orissa belts. These areas have sustained high standing crop damages. Since only a few companies cover crop insurance, property and motor insurance claims seems to form the bulk in both Orissa and Andhra Pradesh.
Even the government machinery wants the financial assistance to reach the needy as quickly as possible, especially the poor farmers who have taken the worst hit during the cyclones. So the requests to insurance companies are coming from the topmost political echelons to speed up the claim processes. The largest of the financial claims have to do with general public insurers with big commercial Vizag establishments as their clients. This in turn will affect the books for the 3rd quarter of this financial year.
In comparison, general private insurers by all indications are to be hit only marginally. Big insurance companies have already started taking proactive measures towards claims handling that arise from catastrophic incidents. Representatives from the companies are reaching the Cyclone affected areas in Vizag to examine the veracity of these claims and disburse settlement wherever applicable. In cases of large catastrophe, this is always the standard measure of insurance companies.
They deploy company personnel along with loss assessors and surveyors to determine payment and claim size whether partial or total. These people assess the degree of damage incurred with payment amounts depending upon degree of loss as well as the overall crop or property sum insured. Compared to all this, the overall estimated Life Insurance claims seems to be quite low with few people opting for this form of insurance in the areas most affected by Hudhud. As per the official statistics, so far 24 people have lost their lives in this devastating cyclone that has led to much property and crop damage.
The recent Jammu Kashmir floods called for claim settlements of over INR 3000 crore where the state-owned insurers were pressurized to disburse the claimed amounts minus verifications. However, Supreme Court withheld this order of Jammu and Kashmir High Court and allowed insurers to settle claims as per regulations albeit in a timely manner. With each catastrophic incident of this proportion, the clamor for setting up of a Catastrophe Pool gets louder. Such a central body will be able to fund losses fast and in a way that it reaches directly to those in real need. All the claims can then be settled through this general pool with different insurance general companies being the stakeholders.
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