Insurers Expect India Quake To Result in 50,000 Claims.

The massive earthquake that hit western India is expected to bring in more than 50,000 insurance claims against life and accident policies. Executives of Life Insurance Corporation of India and state-run general insurance companies estimated that the amount of such claims would be around 4 billion rupees ($86.4 million).

Claims from industrial losses could be much higher. Several industrial units in the Kutch-Saurashtra region, including some fertilizer units and petroleum-handling facilities of the state-run Oil & Natural Gas Corp. and the major port of Kandla, were severely damaged.

Damage and destruction of buildings has been extensive, with total property damage estimated by the government to exceed 100 billion rupees ($2.16 billion). Nearly 70% of buildings in the towns of Anjar, Bacchau and Rapar were turned into heaps of debris or were badly damaged. Many of the buildings destroyed in Ahmedabad, Surat, Rajkot and Bhuj are new structures, some of them high-rises.

The earthquake has caused much apprehension in India, with public debate focusing on issues such as insurance and poor quality of building construction that flouts the National Building Code on quake-resistant structures. This has forced the new players in the recently opened insurance market to consider inserting special provisions on catastrophe insurance in their newly designed policies.

Meanwhile, the Insurance Regulatory and Development Authority is considering a proposal to make catastrophe insurance compulsory for all high-rise buildings and industrial plants.