As the death toll in the devastating earthquake in Nepal continues to rise, GIC Re, which is the largest re-insurer in the Himalayan nation, said the company is expecting to pay a whopping Rs 1,000-crore claim against the damages caused by this natural disaster.
"My company, which is the largest reinsurer in Nepal, is preparing itself to pay around USD 160 million (Rs 1,000 crore) of claim out of the devastation caused by 7.9 earthquake that shook the densely-populated Kathmandu valley and the rest of the Himalayan kingdom," GIC Re chairman and managing director A K Roy told PTI.
He further warned, "Rs 1,000 crore is the maximum that we should be paying in the worst scenario. We have done reinsurance business with 13 Nepalese non-life companies. We are expecting claims from segments like power plants, housing complexes, commercial buildings and hotels. The claims may lead to higher reinsurance premium in the region."
GIC Re also hinted that it may increase its reinsurance premium in Nepal in the future.
"As of now, we don't know the quantum of our loss in Nepal. The only thing that I can say at the moment is in case our loss goes higher, then it will definitely result in increasing the premium amount for providing reinsurance cover in that country," he said.
The company has already started the process of assessment and will begin claim settlement by next week. The Nepal market is under-penetrated and is expected to generate large claims, he said adding, "I am not expecting any large claims from India due to the earthquake."
GIC Re has sent a team of its surveyors to Nepal at the request of non-life insurers there to help them assess the damage.
"There was a request from the non-life insurers in Nepal and hence we have sent a team of 10 surveyors for their help," he said.
According to a report by AIR, a leading international catastrophe modelling firm, more earthquakes are expected in the Himalayan region.
"The West segment of the Main Himalayas thrust fault zone (MHT) from West of Nepal to the Western Himalaya syntax has been historically very quiet with only one earthquake in 1905.
"The accumulated energy in the Western segment of the MHT is sufficient to generate earthquakes larger than 8 (points) on the Richter scale. The 2005 Kashmir quake released only a very small portion of the accumulated energy," the report said.
