Hyderabad: Insurance companies have settled almost 90 percent of over Rs 2,700 crore claims made after 'Hudhud' cyclone in Visakhapatnam last year, a senior Insurance Regulatory and Development Authority of India official said on Thursday.
"Vizag (claims) is almost Rs 2,000 crore from public sector units alone. Then private sector will have about Rs 600 crore. One single bulk claim was from steel plant. It should be around Rs 600-700 crore.
About 90 percent of the Vizag claims have been settled on account," IRDA Member (Non-Life) M Ramaprasad told reporters here on the sidelines of a convocation ceremony of the Institute of Insurance and Risk Management (IIRM).
Jammu and Kashmir, which also was Rs 2,000 crore (claims from the industry) and the combined claims for both the calamities would be in the range of Rs 4,700 crore, he added.
As a result of huge claim settlement due to these calamities - floods in Jammu and Kashmir and Cyclone in Visakhapatnam - reinsurance prices may go up for insurance companies, which settled the claims using reinsurance coverage, he said.
"Every company has proper reinsurance mechanism in place. So, therefore, they will recover. The re-insurers have started paying the claims (to insurance companies). What can happen is when they review the re-insurer may increase their price, because they have paid. The cost of reinsurance may go up," he explained.
He said since the reinsurance facility is in place, the reinsurance companies have also started payments
to insurance companies which have settled the claims.
He, however, said they may not be any hike in reinsurance amount if there is stiff competition among re-insurers.
Replying to query, he said IRDA has released draft paper seeking stakeholders comments on the issue of bringing down the claim settlement period from the existing 30 days.
"There is a regulation called protection of policy holders' interest, which gives the limits to settle the claims. We are reworking on that. We are reviewing it because it is 10 years old. Today we feel that with lot of technology coming up we are trying to bring down the time limit," he said.
Non-Life sector has grown at 10 percent during April-January period compared to the same period last year, he said.
Last year, premium was Rs 77,000 crore and is expected to touch Rs 85,000 crore during the current financial year, he added.
