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Insurance cos bracing for flood of claims

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Our Bureau

Chennai, July 28

GENERAL insurance companies are bracing themselves for a number of property and motor claims following damages due to flooding in Mumbai.

Officials say it is still early, as normal life resumes slowly and people start returning to the office. Preliminary stocktaking of the losses is going on.

At the moment, public sector insurance companies are grappling with the possibility of a claim of $500 million on account of loss of the ONGC's offshore oil platform near Mumbai.

Asked for his estimates of damages on account of rains, the Oriental Insurance Company's Chairman and Managing Director, Mr M. Ramadoss, said, "The initial estimate of fire policy related losses alone would be Rs 50 crore, apart from motor vehicle losses. We have some stock godowns affected, and some small and medium enterprises affected. Besides, helicopters of Pawan Hans would be affected. The Reliance Industries' Patalganga unit and BPCL unit have closed down wherein we have a share. Of course, ONGC loss is estimated to be big as the value of the platform is around $500 million."

United India Insurance Company is the lead insurer for ONGC while other public sector companies have a share in the account. Speaking on the ONGC platform damage, Mr V. Ramasaamy, General Manager, United India Insurance, said, "The rescue operations are getting first priority. We are making arrangements for surveys to be done. We will know the correct picture in four to five days."

Private insurers are also awaiting claims in the next few days. Mr Shrirang Samant, Managing Director, HDFC Chubb General Insurance company, and Mr Arun Agarwal, Managing Director, Cholamandalam MS General Insurance Company, said, their companies had not yet been able to assess the full extent of the damage on their portfolio and that a clear picture would emerge only after a couple of days.

Mr V. Ramakrishna, Managing Director, India Insure Risk Management Services, a company providing brokerage and advisory services, said, "These floods have been a learning experience for both insurers and companies. From a professional point of view, I have to express my disappointment at the way many companies have baulked at covering themselves adequately for such contingencies.

"Many of them just want the cheapest cover. A number of them would have taken fire policy, but not cover for loss of profits."

(This article was published in the Business Line print edition dated July 29, 2005)
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