The domestic general insurers are now expecting a Rs 2000 crore hit from two states- West Bengal (WB) and Orissa where cyclone “Amphan'' has severly devastated some of parts of these two states.
Till Saturday, the general insurance industry had already received claims worth of Rs 945 crore from these two states with more than 90 per cent of the total claims originating from the economically developed WB, with higher insurable properties, where torrential rains coupled with strong winds caused severe flooding and wind related damages especially in the Kolkata metro region, resulting in inundation and damage of both public and private infrastructure.
Around Rs 836 crore of claims have been triggered by the property damages under fire policies from the WB and rest are from motor and other policies.
In fact,cyclone “Amphan'' became the strongest storm in the decade to make landfall in the WB causing economic losses of Rs 1 lakh crore , according to the state chief minister Mamata Banerjee. Particularly, North 24 Parganas, Purba Medinipur, Howrah, Kolkata, and South 24 Pargana districts in the state were noted to be worst-hit by the storm,according to various reports.
Though Orissa, in some of its coastal rural areas, has suffered a large economic losses, its ’insurable damages are nominal as reflected in the amount of claims from the state , said the industry sources.
As the claims from other segments like business interruption(BI) including advance loss of profits(ALOP) and crops start piling up, the overall claim figures from two staes will easily reach Rs 2000 crore, said analysts.
“Many more motor claims are also yet to reported as the lockdown in those states are still continuing,’’ said industry sources.
In an interesting development, the general insurers who wouldn’t accept any business interruption claims caused by the omngoing countrywide lockdown, enforced by the government to check the spread of Covid-19 pandemic, are willing to pay similar claims due to cyclone Amphan, though lockdown still continues.
“We will certainly pay all BI claims related to cyclone “Amphan'' though it happened during lockdown as long as any physical damage has been caused to properties of business establishments by the cyclone. Mere BI is not payble as our policies only cover interruption due to physical damage caused by a covered peril,'' explained Sanjay Dutta, chief (claims, underwriting and re- insurance, ICICI Lombard General Insurance.
New India Assurance(NIA), the country’s largest general insurer has already received Rs 550 claims worth of around Rs 170 crore and Kolkata based National Insurance Company(NIC) similarly has received over 500 claims, from business enterprises,shops and factories,.amounting to Rs 200 crore that is expected to go up by another Rs 100 crore in another few days.
NIC officials have said the coronavirus lockdown is causing some delay and after virtual inspection,which takes 10 to 15 days, the losses could be arrived at.
According to the local media reports, more than 88,000 hectares (217,453 acres) of rice paddy and 200,000 hectares (494,211 acres) of vegetables and sesame crops were damaged in the WB. According to thestate horticulture department of South 24-Parganas and East Midnapore districts, around 3,500 hectares (8,648 acres) of betel leaves crop with a value of $500 million was damaged.
International insurance broker Aon in its monthly catastrophic report has highlighted that the total economic losses attributed to cyclone “Amphan'' were tentatively estimated at upwards of $15 billion. An initial damage assessment report from the Bangladesh government cited that total economic costs in the country were to approach $1.5 billion, said the report.
The situation in India was even more severe, with the state of West Bengal citing an economic cost of up to Rs 1 trillion ($13.2 billion) alone. Further economic losses reaching into the hundreds of millions (USD) were anticipated in other states such as Odisha. Most of the losses were likely to be uninsured given low insurance take-up in India and Bangladesh, said the report.
Amphan became the strongest cyclone on record to occur in the Bay of Bengal during the month of May. The previous record was a
storm in 1999 with estimated sustained winds of 260 kph (160 mph) that struck the Indian state of Odisha, that officially resulted in
approximately 10,000 fatalities, said the report.