Non-life claims in Surat to be settled without survey

MUMBAI: The insurance regulator has allowed non-life companies to settle claims in flood-hit Surat without a survey. This relaxation would apply only for claims upto Rs 50,000 till October `06. The bad news for the industry is that claims may add up to over Rs 2,000 crore.

Gujarat is turning out to be the insurance industry’s bugbear. Insurers have been hit with claims on account of cyclones, earthquakes, riots and floods. Despite large claims, they have managed to protect their balance sheet through reinsurance.

However, successive years of bad weather claims is making it difficult for companies to explain to reinsurers that these are one-off events. Insurers say that they expect claims to get widely distributed as insurance awareness had increased after the calamities of earlier years.

So far, there has not been any major project claim. ONGC and Reliance had shut their refining plans during the floods, which have now been restarted. Senior officials at ONGC said that there would not be any insurance claim for business interruption despite the shutdown.

There are a large number of motor insurance claims since the city was inundated for several days. A large number of claims are also expected from the textile industry concentrated in the city. Besides, insurance companies expect claims from the diamond processing industry. However, insurance claims here are expected to be much lower than the actual losses because of the low level of insurance.