The December floods in Chennai led to a boom in the insurance sector, recording 40-50% growth. This is the aftermath of the insurance claims that reached ₹5,000 crore after the floods. The second costliest insurance event in India on sigma records, its total losses are estimated to be at least $2 billion, and insured losses $0.8 billion.
The Micro, Small and Medium Enterprises (MSME) sector suffered losses amounting to ₹11.8 lakh consisting of more than 14,000 units. Consequently, industries are now looking to expand their coverage under fire policy, machinery and motor insurance policy. The demand for add-on covers such as removal of debris, architect fees, temporary removal of stocks, loss of rent and additional rent for alternative accommodation in case of any loss, is also on the rise.
On the other hand, home owners are opting for motor and home insurance. In this sector, individual houses were insured only for the depreciated value of the original cost incurred at the time of construction. This prevented the home owners from availing full claim for the loss. House owners are renewing the policy to gain full coverage, that is, the current reinstatement value. They are also not shying away from additional expenses on premium and the benefits.
After the floods, industries financed by banks are revising their insurance for the current value. More emphasis is being given to the adequacy of insurance and comprehensive cover. Insurance agents have observed a growth of up to 200 percent in the last six months, with comprehensive coverage that also includes appliances and other contents within the premises.