The general insurance industry is likely to receive claims of over $500m after record rains caused massive flooding in the south Indian state of Kerala.
The rains and resultant flooding have caused unprecedented loss of lives and property across the length and breadth of the state with economic losses expected to cross $3bn. The rains have also caused massive landslides across the hilly terrain of the state.
As per data released by the Indian Meteorological Department between 1 June and 18 August this year, the state received cumulative rainfall of 2344.84mm against a normal volume of 1649.3mm.
Motor insurance will bear the brunt of the claims as the state has one of the world’s highest density of vehicles on the road numbering over 11m, with close to 1m vehicles added in 2017 alone. The state also has one of the highest numbers of luxury cars registered anywhere in India.
Considering these figures and the total devastation across many districts, the magnitude of motor claims from across the state itself will run into millions of dollars. Over 300 lives have been lost so far and the number is expected to go up as many people were left stranded when the flood waters entered their homes and premises. The life industry is thus also expected to take a major hit.
There have been considerable losses to property and businesses across the state. Though most of the losses are uninsured, substantial claims can still be expected.
Entire luxury condominiums in cities like Kochi and Aluva were submerged by the surging flood waters. Industrial corridors also reported massive flooding and insurers can expect claims from damages to stock, equipment and machinery from factories and warehouses.
The state’s main international airport at Kochi has suspended operations till 26 August, as water entered the complex inundating the terminal buildings and warehouses around the airport premises. Losses here too could run in to millions of dollars as critical plant and equipment and goods stored in the premises have been damaged or destroyed. There is also a possibility that aircraft parked in the airport premises could have been damaged from the flood water.
The general insurance industry paid claims amounting to $200m for the Jammu and Kashmir floods of 2014 and $680m for the Chennai floods of 2015.