Last year's cyclone, which hit Kandla on June 9, proved to be the single-most expensive catastrophe for India's insurance industry with the total claim amount being about Rs 1,200 crore. The magnitude of the loss meant that the central government, as well as, the Gujarat government pressed for a speedy settlement of claims. With the threat of yet another cyclone looming large, the fact that 88 per cent of the 3,000-odd claims made for last year's Kandla cyclone have been settled may offer some consolation.
According to General Insurance Company, a payout of Rs 477.57 crore had been made April-end. This, once again, is the single largest claim settlement for the industry representing 5.08 per cent of the aggregate premium earned during the 1998-99 accounting year.
As far as the Gujarat region goes, more than 90 per cent of the claims made with the four GIC subsidiaries - Oriental Insurance, New India Assurance, National Insurance and United India Insurance - have been settled. The total payout made, till date, is approximately Rs 340 crore.
The claims still pending are mainly windmill and hull claims. Says B M Joseph, manager, New India Assurance, "The windmill claims haven't been fully paid as yet because the repairs are mainly being done outside the state. Sixty to 70 per cent of on account payments have been made against these claims, with the remainder being paid once the repairs are completed. This is because many of the windmills are owned by Chennai-based companies like NEPC, who are getting the repairs done there."
On account payments involve part-payment of the assessed claim amount, with the remainder being paid at some future date.
The unusually brisk disposal of pending claims for a catastrophe of this magnitude meant a departure from the traditionally, slow-moving method of claim settlement. The difference was made by delegating financial authority to the branch and divisional office level. All the four subsidiaries posted senior officers at the lower tiers of the assessment machinery and pressed into service the maximum number of surveyors. Further, special committees were formed at the district and regional office level to monitor the progress of claims settlement, with regular reports being sent to GIC.
The Kandla experience however comes with a caveat. Natural calamities like floods or cyclone usually impact a large area. With some parts of the state still lacking road linkages, their remoteness leads to delay in the surveyors' visits and simultaneously a slow-down in settlements.