2005 monsoon in India cost Allianz AG Rs 241 cr

Germany-based insurance firm Allianz AG saw its claims rising substantially in 2005 owing to an unprecedented monsoon in India.

The company said the floods in India, including Mumbai and Chennai, caused the greatest damage after hurricane Katrina in the US.

Also, it said the amount of claim that was settled after floods in various parts of India spiralled to ¤ 45 million (over Rs 241 crore), against ¤ 67 million owing to hurricane Katrina.

The third biggest claim was caused by the storm damage in northern Europe (¤ 9.8 million). In India, Allianz provides reinsurance services to its joint venture Bajaj Allianz General Insurance Company and also to IFFKO Tokio General Insurance and royal Sundaram.

"The damage costs were significantly higher owing to natural disasters and major damage. In particular, the series of disastrous hurricanes in the US, the flood disaster in India and a fire in a high-rise block in Madras caused high damage costs," said Allianz.

Allianz suffered ¤154 million loss arising from natural disasters, which raised the loss ratio on earned premiums for own account for property casualty reinsurance to 62.6 per cent from 58.2 per cent in 2004.

Allianz had to add ¤ 88.2 million to its equalisation reserve. Equalisation reserve is a long-term reserve maintained by insurance companies to meet unforeseen cash outflows because of events such as flood, earthquake or fire.

The reserve is seen as an insurance company's "rainy day fund" compensating for unforeseen and expensive events.