After the recent J&K floods and Cyclone Hudhud which battered Andhra Pradesh and Orissa coasts, taking a heavy toll on the profitability of non-life insurers, the industry plans to increase premia under the catastrophe category.
General insurers are likely to take a hit to the tune of Rs 4,000 crore from both these calamities. Though Cyclone Nilofar weakened, they have already kept their capital reserved to settle claims in this case too, industry sources said here today.
"There may be a big hit to bottomlines due to recent floods and cyclones, but there will not be a big problem if the economy picks up steam. The first half is traditionally a lean period and the actual business will start coming in the remaining period of the fiscal only," General Insurance Council secretary general R Chandrasekharan said here today.
"We are worried about Cyclone Nilofar. I hope that it will not cause damages on the Gujarat coast," New India Assurance chairman G Srinivasan said while speaking to media on the sidelines of an insurance summit held by Asia Insurance Post in Mumbai.
United India Insurance chairman Milind Kharat already hinted that his company might increase premia in certain catagories of products in the light of losses borne by the company due to floods and cyclone.
Private non-life insurer SBI General Insurance, which reported a 22 per cent spike in premium income in H1 of the current fiscal, against the industry growth of 10 per cent, said that its topline growth may take a hit due to the two recent two catastrophes, SBI General Insurance Managing Director and Chief Executive Bhaskar J Sarma said.
