Damage by cyclone Thane to lower general insurers’ profitsJanuary 3rd, 2012 - 6:14 pm ICT by IANS
Chennai, Jan 3 (IANS) Insurance claims after Cyclone Thane crossed Cuddalore on the Tamil Nadu coast last week leaving a trail of death and destruction could bring down profits of general insurers this fiscal, say industry officials.
Both public and private general insurers are estimating the quantum of destruction wrought by Cyclone Thane on properties insured by them in Cuddalore and Villupuram in Tamil Nadu and Puducherry.
Also, they are looking into the loss-of-profit policies that cover the risk of disruption in operations and the consequent profit loss.
“Major companies have loss-of-profit policies. The risk cover would kick in if an insured is not able to start operations say within seven days of stopping the operations,” K.V. Krishna, regional manager, New India Assurance Company, told IANS.
Cyclone Thane crossed the Cuddalore coast Friday morning packing a wind speed of 140 kmph, blowing away factory and house roofs, collapsing walls and uprooting cell phone towers and electric poles, among others.
“Our offices in the cyclone affected areas worked on Saturday and Sunday to receive claim intimations and appoint surveyors,” said T. Poopathi, regional manager, National Insurance Company.
“We have deputed a team of officials from our claims department to Cuddalore to expedite the loss assessment process. However, our exposure is not very large in that region,” said S.S. Gopalarathnam, managing director, Chola MS General Insurance Company.
According to the insurers, claim intimations have started coming in now from all those insured — corporates, shopkeepers, hotels, poultry farms and others.
About the loss, a National Insurance official in Puducherry told IANS: “The claim will be for damages to roofs/building, electrical fittings and stocks all insured under the Fire Insurance policy.”
He said in case of shops, bulk of the damage is due to loss of neon signboards and other kinds of boards.
“With strong winds blowing off the roofs, the rains damaged the work-in-progress, raw material and finished goods apart from the plant and machinery,” said New India’s Krishna.
He said loss assessors had been appointed for those policies issued under offices located in the Chennai region and steps were being taken for those issued by offices falling under other regions.
“Around 80 claims have been reported till date. Bulk of the claims are for small sums and do not exceed Rs.one crore,” Krishna said.
However, there are big corporates where the loss will be higher due to damage to stock and loss of profit policies.
Officials of National Insurance and United India estimate their total risk exposure due to Cyclone Thane would be to the tune of around Rs.7 crore while the loss is expected to be higher for New India as it has insured several big corporates like Asian Paints, Shasun Pharmaceuticals and others.
An official of New India predicted the loss would be around Rs.25 crore for the company.
Asian Paints and Shasun Pharmaceuticals have suspended operations of their Cuddalore plant after the cyclone.
Sugar major EID Parry India has suspended operations of its plants in Cuddalore and Puducherry.
According to EID Parry, its assets are adequately insured at the affected units.
A senior official of Nagarjuna Oil told IANS that the damage to their oil refinery project was not much.
An official National Insurance in Puducherry said a couple of beach resorts/hotels had also reported damage.
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