The Hindu Business Line : Mumbai rain claims at 10,000 for Rs 1,500 cr

THE blowout in the skies over Mumbai may have tested the prowess of the country's commercial capital to deal with a natural calamity of great magnitude. And now, the aftermath of the unprecedented downpour last week is testing the financial strengths of the non-life insurance companies.

Even as the flood waters are receding from the streets of Mumbai, insurance companies are being flooded with claims, mostly from individuals and small and medium commercial establishments.

Industry sources say the four public sector insurance companies, led by New India Assurance Company have so far received about 10,000 claims, totalling Rs 1,500 crore. New India, being the lead player in this part of the country, will have to service roughly 50 per cent of these claims.

The four public sector insurance companies together account for about 80 per cent of the non-life insurance market in Mumbai, the remaining being with the private sector companies.

"The figure will certainly go up further, as the companies are still receiving claims. Usually, non-life insurance claims take time for reporting after a natural calamity like this," said an industry representative.

In fact, this is considered to be one of the biggest claims after a natural calamity, especially as the density of non-life insurance coverage is the highest in Mumbai compared to the rest of the country. Although the tsunami that ravaged the coast of Tamil Nadu took a much heavier toll of human lives and property, the number of claims received by the insurance companies was much less comparatively.

For example, New India which is the lead player both in Maharashtra and Tamil Nadu, received 1,000 claims totalling Rs 15 crore after the tsunami tragedy, while the Mumbai rains have so far brought in about 5,000 claims, totalling over Rs 500 crore.

"The reason is the victims of the tsunami in Tamil Nadu had relatively low insurance coverage, unlike in Mumbai. About 20-22 per cent of our all-India business of Rs 4,300 crore comes from Mumbai alone," Mr A.V. Girija Kumar, Assistant General Manager of NIA, told Business Line.

Interestingly, a majority of the claims are from individuals and small and medium entrepreneurs. "Of the 5,000 claims we have received so far, 1,500 are for damaged cars, another 1,500 under fire insurance cover, involving dwellings and shops, and 1,700 from small and medium entrepreneurs, such as shopkeepers," said Mr Kumar.

NIA, like the other companies, is focusing on the small claims of Rs 50,000 to Rs 1 lakh, as these insurance holders have been the worst hit by the rains. "At NIA, we have simplified the settlement process for the small holders. We are targeting to complete the settlement process within 30-40 days of submission of the claim," Mr Kumar said.

The insurance companies are aware that the Mumbai rains will test "how deep our pockets are," considering the fact that non-life insurance is a high-risk business.

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