Insurers may see claims worth nearly ₹5,000 crore from Gujurat rains | Insurance News
Even as parts of the country see floods, insurers are expecting nearly ₹5,000 crore in claims after excessive rains battered Gujarat. According to experts, the claims would be mainly in property lines.
However, they do not believe that premiums would increase in the already discounted property insurance market.
Gujarat saw one of its most severe waterlogging and flood episodes last month. Surat, Navsari, and Valsad were among the worst-affected districts, while Ahmedabad, Vadodara, Rajkot and several other urban centres witnessed submerged roads, resulting in disruptions to transport and public services.
According to an insurance broker, “The insurance industry is expecting over ₹4,000 crore claims from Gujarat floods mainly on the property lines. Motor insurance claims are expected to follow. It is one of the heavily insured states in terms of property insurance.”
In comparison, insurance claims during 2024 floods in Gujarat stood at ₹1,500-2,000 crore.
According to reports, thousands of homes and large stretches of road infrastructure were inundated, forcing authorities to evacuate more than 40,000 residents from vulnerable areas. Schools and colleges were temporarily closed in several districts, and rescue teams, including the Army and disaster response forces, were deployed to assist stranded residents.
“The claims have started coming in from Gujarat. The industry is likely to see nearly ₹4,000-5,000 crore worth of claims mainly on property lines. However, it is also heavily reinsured and hence, direct insurers will not see much pressure on their books. Therefore, despite these incidents, the rates in property insurance lines are not going to see any revision because of the claims. Further, motor insurance claims are also expected to come in gradually,” said a senior official at a private insurance firm.
The general insurance industry has seen heavy discounting in fire and property risk to strengthen their topline and recently, the Insurance Regulatory and Development Authority of India (Irdai) had also advised the insurers to maintain prudent underwriting and sustainable pricing amid this intense competition.
