Insured losses due to natural disasters have plummeted to Rs 17,000 crore in the past three years in India. However, with a spate of floods across north and east India this financial year, losses are likely to increase.
During the past financial year, insurers faced claims of almost Rs 5,000 crore from flood-hit Tamil Nadu and Puducherry. Insurers, including United India Insurance, were the worst-hit because of these incidents which led to heavy loss of lives and properties.
Insurance sector officials said the absence of any risk- mitigation tools like catastrophe bonds or natural disaster pools, have led to losses being directly borne by the companies. While there was a proposal to have a natural catastrophe pool in the country to deal with losses from natural disasters, a consensus is yet to be formed on the issue.
High-risk segments like terrorism and nuclear energy already have insurance pools. A pool similar to this had been proposed for the catastrophes like flood, earthquakes, landslides and storms, where all insurance companies would contribute to the corpus.
