The initial estimates of general insurance claims arising from the Kerala floods, reportedly at Rs 10 billion, are lower compared to the total claims during the Chennai floods in 2015. Initial figures show that the penetration of insurance in households and shops is lower in Kerala, said a senior industry official.
Speaking on the sidelines of the Insurance Advisors Meet at Chennai, K B Vijay Srinivas, chairman-cum-managing director (joint charge), United India Insurance Company Ltd (UIICL), said that initial estimates show that penetration of insurance is lower in Kerala. UIICL has received insurance claims to the tune of Rs 3.5 billion so far from 5,000 claims.
The Kerala government has estimated around Rs 195 billion in economic losses due to the rains, flood and landslides, while the initial estimates of insurance claims arising from the floods, which started on August 8, were at around Rs 10 billion.
"It is not even 10 per cent. It is our responsibility to see that more people get insured," said Srinivas. "While motor vehicle insurance is mandatory and more people have shown interest in health insurance with the increase in healthcare expenditure, households and shops are not insured to the extent...," he added.
The losses claimed after the Chennai floods were much higher than this initial estimate for almost 12 districts of Kerala. According to reports, insurance companies had received around 50,000 claims worth around Rs 48 billion from Chennai after the floods.
"We are still waiting, claims are still coming and we don't know how much will be finally coming. We are the biggest player there among all the insurance companies," Srinivas said. A meeting of public sector insurance companies was held in Chennai, in which it was decided to simplify the procedures for clients from Kerala.
"It will, to some extent, have an impact on the company's financial performance. How much could be moved to reinsurance arrangements has to be looked into. We are trying to do things fast, but there may not be any particular deadline," he added. "Some of the company's major accounts in Kerala include Cochin Shipyard and public sector fertiliser manufacturer FACT, among others. While Kochi Airport is not an account, there is a small claim on the solar panels in the airport," he added.
For the year ended March 31, 2018, the general insurer reported a net profit of Rs 10.03 billion. Its gross premium income, driven primarily by motor, health and crop insurance, grew by nine per cent to Rs 174.30 billion. During the financial year, the company registered a solvency ratio of 1.54 per cent (1.5 per cent is stipulated by the regulator). It expects the solvency ratio to be around 1.5 per cent at the end of this financial year, too.
The company's thrust area will continue to be motor and health insurance, while it is also looking at growth in some other portfolios such as fire, engineering and liability.