A man cleans up his house after flood water subsided at Chengannur district of Kerala, on Aug 22. (Source: PTI) 

Kerala Floods: General Insurers Brace For Rs 1,300-Crore Claim Payout 

Kerala’s worst floods in a century could cost general insurers at least Rs 1,295 crore—due to motor and property damages.

That's according to the first round of claims data compiled by the Insurance Regulatory and Development Authority of India. General insurers across India had received 10,928 claims as on Aug. 24.

“The number of claims is expected to rise by the next week,” PJ Joseph, member (non-life) at the IRDAI told BloombergQuint. “As the situation stabilises and water recedes from affected areas, more claims will get filed over the month.”

Kerala received 37 percent higher-than-normal rainfall in August. The death toll, as on Aug. 19, was over 350 and nearly 7.24 lakh people had sought refuge in relief camps. Economic losses could range between Rs 15,000 crore and Rs 20,000 crore, according to an assessment by industry body Assocham.

Also read: Kerala Flood Relief: How You Can Help Kerala Get Back On Its Feet

Of the total claims, nearly half were for motor damages amounting to Rs 100 crore; and about 1,200 related to commercial and residential property damages worth Rs 750 crore, according to data provided by R Chandrashekhar, secretary general, General Insurance Council. The remaining claims mostly stemmed from crop losses.

While the number of motor claims is higher, about 80-90 percent of the estimated damages will be paid for property, an officer from New India Assurance told BloombergQuint requesting anonymity. Most of the property claims have come from resorts, hotels, shops, offices and other commercial establishments, the officer said.

In the crop insurance segment, market leader Agriculture Insurance Company of India, which covered 4,520 farmers in Kerala, reported about Rs 12 crore of claims due to sowing failure. “The data for yield losses due to the floods is expected to come over the next few weeks and will be settled accordingly,” Rajeev Chaudhary, chief risk officer at the company, told BloombergQuint. So far, he said, most claims have come from Thrissur and Alappuzha districts.

Also read: Kerala – Where God & Communism Co-Exist, Death Can Be Dealt With

PSU Insurers To Pay The Most

The insurance regulator, to expedite the settlement process, has asked all insurers to report the number of intimated and settled claims daily. Insurers must nominate a senior officer to coordinate claim surveys and settlement.

“These are the first set of claim numbers reported to us till Friday,” said Chandrashekhar. “More clarity on the number of claims and the extent of losses will take another two-three weeks.” All public and most private insurers, he said, have launched public awareness campaigns, dedicated helpline numbers and simplified claim intimation forms to expedite settlement.

State-run general insurance companies account for 85 percent of the amount claimed. United India Assurance reported 5,384 intimated claims—the highest—worth Rs 511 crore, a senior official at a public-sector insurer told BloombergQuint on condition of anonymity. India’s largest general insurer, New India Assurance, faces losses worth Rs 324 crore—the second highest among insurers.