Page 20 - Insurance Times September 2019

'RAINSTORMS-

FLOODS-

DELUGE'… ARE

INSURABLE?

T he current scenario in 90% of the Sub-Continent Burning Cost Concept in Rating Risks with such a

of India in the months of July-August 2019
challenging scenario?
reveal an outrageous form of Acts of God perils
of Rainstorms- Floods- Deluge….
The basic question that arises is whether these AOG Perils
have remained Insurable and Reinsurable by National
Since 2013-14 to 2019-20, these Natural Catastrophe Perils Insurance Industry as well as National and International
have been playing havoc every year in various parts of the Reinsurance Industries worldwide?
Sub-Continent of India. A question arises: "How to treat
these AOG Perils as Insurable or Reinsurable when no All remedial measures have proved to be insufficient!
revisions in premiums are 'adequate' to cover these perils
occurring every year with unprecedented severities and Not only in India but in entire Asia, these perils pose same
frequencies?" scenario! Africa is also not spared with Cyclone IDAI of March
2019, spreading from Mozambique to Zimbabwe, Malawi
Rating of the Risks covering these AOG Perils is a big and Madagascar. The flooding has been in Mozambique with
challenge! When such catastrophes occur every year, how River Buzi playing havoc with 1.7 million people as victims
to have a Rating on Payback Period bases? How to consider of the disaster and the aerial views described the floods as
"Inland Oceans extending for Miles and Miles."
About the author
All corrective measures to cap NAT CAT Events of Less
K. L. Naik Limits, reduce commissions with NIL Profit Commissions
Director etc. in Proportional Treaties and even CAT Excess of Loss
Naik Consultancy & Advisors L.L.P Treaty Programs with overall pay back periods of up-to 20
Mumbai years etc. in Non-Proportional Treaties with not more than
One Reinstatements and that too with 125% Reinstatement

20 The Insurance Times, September 2019