Chennai, Dec 11 (IANS) With catastrophic flood losses becoming a recurring phenomenon in India, general insurers in future might ask the policyholders to bear some portion of the loss, said a top insurance sector official on Friday.
New India Assurance Company Ltd. chairman-cum-managing director G.Srinivasan also said the company has taken measures to expedite the claims settlement or at least make ‘on-account’ settlement within a week of intimation.
“There will not be any hardening of the premium rates due to the flood losses. But insurers may increase the deductibles – that portion of the initial loss amount to be borne by the policyholders,” he said while briefing the media on the steps taken by New India in settling the insurance claims arising out of the recent floods in Tamil Nadu.
Heavy rains – the worst in a century – battered Chennai, as well as adjoining Kanchipuram, Cuddalore and Thiruvallur districts for the past month resulting in unprecedented floods.
On fast processing of claims, Srinivasan said, in the case of vehicles, a matrix has been worked out whereby based on level of submergence, the company may pay a fixed sum to the policyholder up front.
“The claim will be settled on cash loss basis. The insured/vehicle owner may get the vehicle repaired at his convenience later,” he said.
Similar matrix is being worked out for consumer durables insured under the home insurance policy, he added.
Srinivasan said all the four government owned general insurance companies have set up nine insurance claims camps.
“We have asked the surveyors to give a simple report within 24 hours so that initial payment could be made fast and the final settlement could be made later,” he said.
New India is also looking at the possibility of deploying its staff to do the survey in case of simple damages.
“We have now standard operating procedures for processing claims in case of catastrophic losses,” he added.
Srinivasan also discounted the possibility of insurance industry classifiying various regions as high or low flood prone areas and charge a differentiated premium.
According to him, the insured Tamil Nadu flood claims may be around Rs.2,500 crore for the industry.
New India till date has received around 1,700 claims intimations with a loss value of around Rs.425 crore.
Not ruling out the amount going up further, Srinivasan said a major portion of the settled claims will be recovered from the reinsurers.
“The impact in our balance sheet will be around Rs.50 crore,” he said.
He also said the claims for aircraft damage may be around Rs.200 crore, but none of the aircraft that got damaged due the flooding of Chennai Airport is insured with New India.
“It is really strange that aircraft got damaged due to floods,” he added.
Some aircraft parked in Chennai Airport were damaged due to gushing water.