Nat Cat to escalate insurance premium
General insurance players are now considering increasing premium rates for properties, commercial establishments, factories and others located in vulnerable areas in the East coast, owing to recurring natural calamities.
According to industry sources, in the last two or three years, insurers had to pay claims worth around INR9,000 crore due to natural calamities in this region.
The calamities include cyclone at Vishakapatnam (general insurance claims of around INR2,500 crore) two years back, cyclone at Orissa (claims of around INR500 crore), flood in Chennai during December 2015 (claims of around INR5,000 crore) and cyclone in December 2016 (initial claims of around INR1,000 crore) in Chennai, stated a report in the Business Standard.
New India Assurance Co Ltd chairman and managing director G Srinivasan said, “We are a bit concerned as these locations are now seeing the natural calamity on a yearly basis. East Coast has become vulnerable especially cities like Vizag and Chennai.”
He added, insurers might have to think of charging appropriate premiums for the properties located in the vulnerable areas of these locations. It will also have to look into the risks much more closely. For instance, the locations, which were affected in the floods last year, was also affected during the cyclone this year, in Chennai. The risk inspection would be important and the premium would be based on this risk assessment.
