New India Assurance to raise premium in high hazards zones

Following the Uttarakhand disaster in which India's largest general insurance company the New India Assurance sees a loss of around Rs 150-crore, it has decided to raise the premium in high hazards zones.

Sri G. Srinivasan, Chairman-cum-Managing Director, New India Assurance said, “The quantum of increase will, however, depend on the risk exposure. The rate hike will be made after doing a risk inspection of the terrain.”

“The major loss came from hydro power stations, apart from a number of small claims,’ Srinivasan said, admitting that the extent of damage this time had caught many by surprise.

Further, Srinivasan said that it has opened the eyes of general insurance companies. “We will be increasing the premium rate for hydro power projects in that area. Such projects will attract differential pricing, depending on the physical hazard it is exposed to in that location”, he added.

When asked on claims settlement, he said that the New India Assurance has settled about a third of the claims, and rest will be settled in the next couple of days.

On Kudankulam project, he said “In India, there is no cover for hot zones in nuclear installations. There is a proposal to form a nuclear pool in collaboration with Indian and foreign companies. But this is still in a very beginning stage.”

“Once such a pool is in place, insurance companies will be able to offer cover even for hot zones, where nuclear reaction takes place. The cover is only for the cold zone at present,” Srinivasan said.

Source: http://www.insuringindia.com/