on October 18, 2014 by admin in Insurance Industry, Comments (0)

Insurance companies flooded with claims after cyclone

HYDERABAD: With damages caused by Cyclone Hudhud in the Vizag region running into thousands of crores of rupees, insurance companies are now flooded by claims. In fact, most of them are gearing up to conduct extensive surveys to assess the exact nature and extent of losses.

An official of the United India Insurance Co admitted that the company has already received claims worth around Rs 500 crore and it is in the process of assessing claims. "We are studying the ground situation and trying to come up with accurate loss figures," he said.

"It is going to be a herculean task for the general insurance companies to assess the damage. But all I can say is that the region has suffered 'substantial losses'. With power and communication networks not being restored completely, it will take some time before the real picture emerges," said P Nandagopal, chairman of Assocham Insurance Council and chief executive officer of IndiaFirst Life Insurance.

Nandagopal, who is also a Vizagite, said the cyclone has caused colossal damages to industrial units in the region. "Once connectivity is restored and insurance companies send teams to conduct surveys in these units, the exact losses will be calculated and settlements done. Though industries have suffered damages, they have adequate (insurance) cover," he said.

Apart from industries, most of the claims being made are pertaining to property and vehicle damages, another industry source said, adding that with airport resuming operations, the survey work will intensify in the coming days.

Another industry source said they are facing a lot of pressure from clients to carry out surveys as soon as possible, but they are unable to do so as flight services have been restored only from Friday morning. "While clients are pestering us to conduct surveys and get the settlements done, we have to first study the situation intently and calculate the losses after conducting the due diligence. The issue is that many people tend to inflate losses during times of tragedy and claim higher amounts, and so we want to tread carefully," he said.

Meanwhile, Prime Minister Narendra Modi, who was in Vizag on Tuesday, had said that even the Central government will be sending an assessment team to carry out a detailed survey of the losses. Stating that Hudhud caused intensive damage to crops and infrastructure, mainly public property, in the coastal AP region, Modi told insurance companies to send officials to Visakhapatnam and 'sympathetically process the claims' at the earliest.

It must be noted that even the Supreme Court had, referring to the Kashmir floods, recently directed insurance firms to be liberal in settling claims in times of natural calamities. "Sometimes we have to ignore the rules and regulations (for paying insurance claims) in the interest of the people suffering from natural calamities," the court had said.

Article source: http://timesofindia.indiatimes.com/City/Hyderabad/Insurance-companies-flooded-with-claims-after-cyclone/articleshow/44864251.cms

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