It is believed that the losses will be less than an estimated $1.6 million, possibly much less.
On Saturday, Cyclone Phailin smashed its way through Odisha and Andhra Pradesh in India, following a massive evacuation of the area, leaving the world and the insurance industry to wonder what would be left behind.
Officials are now saying that there may not be very large losses for insurers to have to face.
According to those officials from the insurance industry, the largest amounts of destruction were sustained by “kuchcha houses” (which are huts) as well as by public property. For that reason, it is believed that the claims that will be made will be quite limited, and the earliest estimates are that the losses will be notably less than Rs 100 crore (approximately $1.6 million).
The insurance industry has found that a large amount of the damage was done to uninsurable property.
According to a senior insurance industry official from a public general insurer, “The number of claims will be limited, since most property that has been destroyed was out of the insurance purview. Though it is too early, it is expected that losses would only be in the range of Rs 50-70 crore.”
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The insurance industry has only just started to see the very beginning of the claims. Until now, the claims have been quite manageable and primarily have to do with the projects within and surrounding the Paradip port. That said, it is expected that there will be a growth in the number of claims over the next little while. Not everyone has been able to return to the area, as the cyclone also left massive flooding behind in certain areas. Moreover, the flooding is expected to increase with the large amounts of rain that are lingering behind the cyclone, particularly in Bihar.
Once people can return to the areas, the insurance industry will start to see more firm numbers. Claims will be submitted and surveyors will be sent by the insurers to assess the risk and the damage. However, time needs to pass before that process can actually get started.