Quake call: Kolkata homes take cover

Udit Prasanna Mukherji,TNN | Jul 21, 2015, KOLKATA: Home insurance, the least-penetrated insurance sector in the city as well as in India, has witnessed a major spurt in demand in the last two months following a series of earthquakes from April 25. As per industry estimates, as less as 1.5% of the city households is insured with some of the well-known residential complexes, commercial buildings and even cinema halls are yet to come under cover.

In India as a whole, the track record of property insurance is dismal. For Tsunami in 2005, the total claim was Rs 200 crore while for disaster in small part of south Florida during the same time the claim was $36 billion (Rs 1.80 lakh crore at the then each value). 

Kolkatans started insuring their homes or flats after the city suffered recurrent tremors during the recent spell of earthquakes. The fear has led to a rise in home insurance in the city, say insurance agencies. A source in the insurance sector said that it has received requests from a lot of big buildings in Kolkata for property insurance. "Of them, we have recently provided insurance to Silver Spring on EM Bypass. Also, the multi-stories building on Lee Road and individual home owners of South City complex and Diamond City have made inquiries for property insurance," an official of an insurance agency said. 

"A home is usually the most precious possession of an average Indian and it needs to be protected. While we don't mind paying 15,000 for a car worth Rs 5 lacs, we don't pay Rs 1,500 to insure our homes worth Rs 50 lakh. We normally learn the hard way and the recent earthquakes have proved that by creating some awareness, but there is still a long way to go. The penetration of home Insurance is less than 0.5% in India, which is one of the lowest across the world. Insure today to avoid regretting later," said Rahul Agarwal, founder director of Ideal Insurance Brokers. 

It is also learnt that some standalone movie halls have also approached for home insurance. Agarwal pointed out that certainly a good demand has been generated for home insurance as some cinema halls are also applying for the same. 

Arijit Dutta, the owner of Priya Entertainment, said that he has insured Priya, the flagship hall of the group, long back and is now planning to even insure his other personal properties following the quake. "I do not know how many cinema halls in Kolkata have property insurance but one should have it," he added. 

According to Ideal Insurance Broking, there is an average 60%-70% rise in enquiry after the earthquake while the conversion ratio, too, at a reasonably high at over 50%. It is learnt that public sector insurers like National Insurance or Oriental Insurance have witnessed a 50% rise in enquiry and 40% rise in conversion. In case of private players, the number is even more. Bajaj Allianz has seen a 200% jump in enquiry and 220% jump in conversion. For Tata AIG General Insurance, the figures are 100% and 75% respectively. Even relatively new players like Future Generali saw a 25% increase in enquiry and 20% hike in conversion.

However, according to Agarwal, very few claims have been registered so far following the earth quake. "We have received only one claim of Rs 95 lakh so far," he added. 

The zonal manager (east) of Bajaj Allianz General Insurance, Rajeev Kumar, said there is indeed rise in the demand for property insurance. "The spurt in conversion is mainly in June and July," he added. The MD and CEO of Future Generali, K G Krishnamurthy, said there is perceptible increase in property insurance demand in Kolkata and east as a whole.