HDFC ERGO General Insurance has launched “Business Kisht Suraksha’’ for protecting the balance sheet of MFIs, financial institutions and banks in the event of a catastrophe or natural disaster.
HDFC ERGO's Business Kisht is a new product and is very different from the existing “Fire and Property insurance policies'' that are available in the market. It does not categorize as an add-on policy but is an independent cover in its own right.
Fire or Property insurance policies cover any physical loss or damage to tangible assets, whereas, HDFC ERGO's Business Kisht Suraksha offers cover to financial institutions for the EMI defaults by their borrowers who could have suffered physical property damage due to listed natural calamities such as floods, earthquakes, cyclones and others. This makes it a very unique cover being introduced in the Indian market aimed at promoting higher financial inclusion by financing institutions,said Anurag Rastogi, Chief Actuary & Chief Underwriting Officer, HDF ERGO General Insurance Company.
Over the past few years, rising natural calamities such as floods and cyclone, have impacted the livelihoods of people residing in these calamity-prone areas. Moreover, such calamities also severely impact the lending businesses in these areas. Business Kisht Suraksha aims to address these concerns by indemnifying against these climatic changes whilst also protecting financial institutions from rising NPAs occurring due to the impact of natural disasters, he explained.
“Business Kisht'' as a product can be customised as per the needs of an individual MFI or financial institution. The product can also be tailor-made depending on the geographical presence of the borrower, MFI or any financial institution basis the perils/climatic conditions that the location is prone to.
Additionally, MFIs or financial institutions also have the option of selecting the number of EMIs that might need insurance coverage concerning the lenders' exposure/.