Insurance

‘Natural disasters are part of standard covers’

Print edition : January 08, 2016

PANKAJ VERMA, Head, Claims Operations, SBI General Insurance, response to an email interview with Frontline. This exchange was facilitated by SBI GI’s public relations firm. Excerpts:

What, in SBI’s estimate, is the quantum of loss caused by the Tamil Nadu floods?

The industry losses are being quoted in the range of Rs.2,500 crore plus. SBI General Insurance has reported losses of Rs.120 crore and above from 1,100 claims as of now.

How many claims has SBI received, processed and settled so far?

SBI General Insurance till date has received 1,100 claims at Rs.120 crore on a gross value basis. Out of which, we have done full settlement for 100 claims, while we have done interim settlement for another 100.

Has SBI simplified the claim procedures specifically for these floods?

We set up a dedicated claims cell in Chennai to manage customer queries and to assist customers in registering their claims locally to ensure a speedy claims process. Additional staff has been stationed in our Chennai branch from the first week of December to support the claims-processing activity. Surveyors have been appointed in all reported claims, and the assessment activity is in full swing. A communication had been circulated to all intermediaries in flood-affected locations of Tamil Nadu outlying the actions required to be followed by the customers in the event of a claim.

SBI General Insurance is also proactively communicating to policyholders through its website, SMS, automated voice calls, online and radio broadcasts informing them of the status of the local branch and the toll free numbers.

Is SBI invoking the “act of god” clause in any of these claims?

Floods are part of “act of god” perils. The standard policy wording applicable to fire insurance provides automatic cover for these perils unless specifically excluded from cover.

Is insurance cover for natural disasters part of the coverage at all levels of insurance? Does this attract a separate premium?

Natural disasters such as floods inundation and cyclone are part of standard covers under fire insurance and motor vehicle insurance. Cover for some perils such as earthquake is available as an additional cover with a separate premium. In some types of insurance policies, you are allowed to remove flood and cyclone risks, which will lead to reduction in premium under the policy.

Does SBI support the idea of a natural disasters relief insurance fund?

Discussion on providing parametric solutions for CAT [catastrophe] perils to National Disaster Response Fund [NDRF] and State Disaster Response Fund [SDRF] is in progress among various stakeholders. We are part of the consultations and fully engaged in the process coordinated by the council and the regulator.

R.K. Radhakrishnan

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