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Film insurance. which was once considered, an additional burden for the film producers, is now being seen as a norm for Indian films.
Now, with both public and private general insurers actively offering products catering to the needs of the film industry, industry experts said that film insurance share in the industry could touch 8-10% in the next 3-5 years. Presently, it accounts for about 2% of the industry's total business.
Film insurance as a concept came into existence in the early 1990s with 'Taal' being one of the first movies to be insured. This was followed by a slew of movies by big banners being insured with general insurers.
Sumant Salian, Business Head-Media and Entertainment at Alliance Insurance Brokers said that they had seen a 45 to 50% growth in business this fiscal compared to last fiscal due to the increase in number of film insurance policies being taken. Apart from covering loss to life or property on sets, he said that insurance not only covers legal issues related to a film, but also post release issues like theatre shutdown due to riots or strike.
While a decade ago, the film insurance segment was dominated by public general insurers, now private general insurers have also entered the market and offer products. New India Assurance, National Insurance Company are some of the public general insurers which offer film insurance. Among the private players, Salian said that companies like Future Generali India Insurance, Tata AIG General Insurance and IFFCO-Tokio General Insurance offer such products.
As per current insurance norms, insurance companies compensate the production house for delays and losses due to adverse weather conditions, natural disasters, damage to property/sets and injury to actor during film shoots. Sudden illness of main cast of the film due to food poisoning and similar conditions is also offered relief under this policy.
Hiren Gada, director of Shemaroo Entertainment said, "The stakes are so high in today's scenario that everyone takes production insurance. As far as insurance for revenue is concerned, it is a bit complicated as you have to make an estimate of revenue and a territory break up. It insures you against any major loss because riots or floods etc which may hurt your collections in those regions."
In these products, the type of cover depends on the budget of the film. The premium for such a policy is usually one to two% of a film's budget. For example: If the total budget of a film is Rs 100 crore, the premium would be Rs 10 to 20 crore. While submitting a request for insurance, the production house is required to give details of the budget including money paid to the actors, apart from the shooting schedule and location.
Vikram Malhotra, COO, Viacom18 Motion Pictures said, "Continuity of any business is prudent and for the same it is important to insure it from any foreseen or unforeseen causes. The whole industry is so much dependent on individuals, like actors, directors and technicians among others."
With almost 250 Bollywood films and 1,000 plus regional films releasing every year, insurers expect the demand to continue. Segar Sampathkumar, general manager at New India Assurance said that as a segment, film insurance was seeing growth.
Not just business, the claims have also increased. K G Krishnamoorthy Rao, MD & CEO, Future Generali India Insurance said that since the coverages have also become wider and overseas shooting has become common, claims due to natural calamities disrupting shoots had also increased. "But, we are seeing more and more producers making it a norm to take insurance," he said.
Regional film industry, is also warming up to the idea of insurance. Industry experts said that, especially, Tamil and Telugu films have started getting insured. "While the traction, compared to Bollywood is low, South Indian films have also started having film insurance," said Salian.
