Page 6 - Insurance Times February 2016

Centre to pay 50% premium for crop insurance: Agro Min New India Assurance

Up till now, the Bengal government because it often suffered damage from gets Rs.500 crore of
gave half the premium for insurance blight, a fungus. The Centre had started
only on paddy and wheat. The Centre the crop insurance scheme in 1999, claims post-Chennai
bore the remaining amount. But now when it paid 50 per cent of the premium
the scenario is going to change. State and the rest was borne by the farmers. floods
Agriculture Minister Purnendu Bose
said that the government But after Mamata Banerjee became Non-life insurance industry ends up
would pay 50 per cent of the Chief Minister of West receiving around 10,000 claims val-
the premium for insurance Bengal in 2011, she an- ued at nearly Rs.2,500 crore from
on crops except potatoes. nounced that her govern- people affected by the Tamil Nadu
ment would pay 50 per cent floods.
Bose said the plan could of the premium in insurance
cost the Bengal govern- involving paddy and wheat. Among them the New India Assur-
ment an additional Rs.150 crore annu- ance Company has received 2,000
ally. In the current Rabi season, farm- "Our insurance scheme ensures that
ers grow pulses, grams, groundnut, any farmer who has suffered a loss of claims approx,
mustard and maize. over 33 per cent in production would amounting to
be given Rs.1,000 as minimum com- Rs.500 crore, in
An agriculture department official said pensation and upto Rs.27,000" the the aftermath of
potato was not included in the scheme minister said. the Chennai rain
devastation. It has
Motor cover to cost 15% more in metros after Chennai flood been able to settle
200 claims amounting to Rs.6 crore
Car owners in Mumbai, New Delhi, Various parameters, including geogra- till now, according to Chairman and
Chennai and Kolkata may have to pay phy and fuel type, are considered while Managing Director G. Srinivasan.
15% higher premium than other parts pricing the motor insurance policy.
of the country as insurance companies Chennai floods have resulted in record He also said it was too early after
believe the risk of insuring cars in big claims, which is more than double of the floods, and the company would
metros are higher. The assessment what insurers faced during the Mumbai expeditiously settle the claims. On-
came after the Chennai floods, which floods in 2006. account payments would be made to
saw more than Rs. 1,500 crore worth the affected parties for immediate
of claims. "After the Chennai experience we relief. He also said there was to scar-
know that severity of claims is higher city of surveyors in Chennai.
"We will have to build in the factor of in metros, so there will be an increase
flood for all big cities that are devel- in premium," said S. S. Gopalaratnam, "Surveyors from Bengaluru and
oping fast and premium should go up MD and CEO of Cholamandalam MS. Andhra Pradesh are on the job and
by 10-15%," said Vijay Kumar, head of He also said, "We are trying to see Chennai also has sufficient number of
motor insurance at Bajaj Allianz Gen- if flood related policy rates could surveyors. Therefore, there is no
eral Insurance. "Simple clogging due to be revised both in motor and property problem of surveyors which we faced
rain water can enter basement park- because losses are higher by up to in Visakhapatnam after the Hudhud
ing and result in claims." 10%”. cyclone in 2014", he explained.

Government may sell stakes in General Insurance as Srinivasan said the Claim process has
been made trouble-free where
part of plan people affected by the floods can
give a simple request with evidence
Centre is working on an ambitious disinvestment agenda for the next fiscal year, which could be a photograph of the
and proposals it is considering include selling stakes in state-owned general in- affected object. A surveyor will do
surers. As a first step, government has decided to convert General Insurance the inspection in 24 hours and an
Corporation of India, into a public limited company. It has also approved reduc- interim payment will be made in two
ing face value of each GIC Re share to Re 1 from Rs 1,000. The government is to three days, he said. There is a
facing a massive shortfall in its divestment target in the current fiscal year now a standard operating procedure
through March. to process claims for catastrophic
losses, he said.
6 The Insurance Times, February 2016

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