The destruction of properties during the recent Gen-Z protests in Nepal has triggered the largest-ever insurance claims in Nepal’s history from a single incident, with claims reaching close to NPR 21 billion to date.

According to data released by the Nepal Insurance Authority, the regulator of the insurance sector, on Thursday, non-life insurers have received 1,984 claims from insured individuals with claims of NPR 20.7 billion by September 16, which is a record high for damages in a single incident.

With assessments of losses being undergone, the claims are expected to rise further. The claims received by insurers so far is more than the claims during the 2015 earthquake, when claims had reached NPR 16.5 billion. Nepal had also launched an insurance scheme in 2020 to cover the risk of COVID-19, and insurers had received claims exceeding NPR 16 billion, according to the regulator.

The Oriental Insurance Company Limited, a branch of India’s Oriental Insurance, has received the largest amount of claims till September 16, according to the data released by the authority. The company alone has received claims of NPR 5.14 billion across 40 cases.

The bulk of this is said to have come from Hotel Hilton Kathmandu, which suffered one of the heaviest losses during the protests. Siddhartha Premier Insurance and Shikhar Insurance, IGI Prudential Insurance, Sagarmatha Lumbini and Company come into the top five positions in terms of receiving the highest amount of claims.

Some of the major business enterprises alone have reported damages worth over NPR 60 billion, according to an official of the Confederation of Nepalese Industries (CNI), a business body, which is collecting details of damages to the properties of the private sector.

The latest protests saw major properties gutted by fire, including the Hilton Kathmandu Hotel, several outlets of Bhat-Bhateni Supermarket, the largest retail chain of Nepal, the headquarters of Ncell, the private sector telecommunication company, an assembly plant and vehicle showroom of Chaudhary Group, owned by Binod Chaudhary, Nepal’s only billionaire listed by Forbes, among others.

-IANS

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The post Gen-Z Protests Trigger Record NPR 21 Billion Insurance Claims In Nepal appeared first on The Commune.

In the wake of stuntman Mohanraj’s tragic death during a fight scene, the conversation around mandatory insurance for stunt performers has resurfaced and with it, a sudden surge in praise for Tamil actor Suriya. Tamil media outlets and Dravidianist actor fans have been quick to portray him as a Kollywood savior of stuntmen, crediting him with silently funding insurance for years. But a closer look reveals the narrative might be more manufactured than sincere.

Veteran filmmaker and actor Chitra Lakshmanan recently addressed this very claim on his Q&A show on YouTube. When asked whether it was true that Suriya had been consistently paying insurance premiums for stunt artists, Lakshmanan bluntly refuted it, “The news that Suriya is continuously providing insurance for stunt artists is not true. He used to give the Stunt Artists’ Union 2 lakh rupees annually until a few years ago, but it is not known if he is still giving that 2 lakh rupees.”

Adding to the confusion, popular stunt choreographer Stunt Silva gave a contrasting account in an interview with Behindwoods. He claimed that Suriya, through his Agaram Foundation, has been arranging insurance for stunt performers for over a decade, contributing ₹10 lakh per year and praised Suriya for not publicizing this act, portraying it as proof of his character.

The conflicting reports raise an obvious question: What is the truth?

More importantly, why this sudden media blitz around Suriya? The praise from Dravidianist circles, especially DMK first family-owned outlets like Sun News seems well-timed to ignore. There have already been whispers that the DMK is grooming Suriya or someone from his family for a future political role, potentially even in the upcoming elections.

Whether or not this is the case, one thing is clear: praise, especially in emotionally charged moments like a stuntman’s death, must be grounded in verifiable fact — not crafted narratives. If Suriya has contributed meaningfully to the welfare of stunt performers, let it be acknowledged. But hype without transparency only invites skepticism and rightly so.

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The post Does DMK Stooge Actor Suriya Contribute To Stuntmen Insurance? Here’s The Truth appeared first on The Commune.

For long, India has suffered dearly from the vagaries of Mother Nature. In 2024, several parts of India, including Assam, Kerala, Himachal Pradesh, and Tripura, suffered severe socio-economic and ecological losses from floods caused by incessant rains. Even now, parts of India, particularly the western and southeastern regions such as Gujarat, Andhra Pradesh and Telangana, continue to reel under severe and widespread flooding, resulting in loss of lives, livelihood, and infrastructural damages.

With the number of natural calamities rising yearly, policymakers worldwide are considering financially viable alternative risk mitigation models that can lower the financial risk to the public purse and fund losses caused by such inevitable circumstances.

Risk Mitigation Models In Other Countries

Sovereign climate and disaster insurance has proved to be an efficient financial risk mitigation measure for climate adaptation among several economies.

Some well-known examples of such risk mitigation programmes are disaster pools set up under public-private partnerships, such as the South East Asian Disaster Risk Insurance Facility for flood risk and the Caribbean Catastrophe Risk Insurance Facility for tropical cyclones and earthquake-related risks (NIDM & III, 2021).

In the Philippines, the Government Service Insurance System Programme covers losses to national government assets from major typhoons and earthquakes on a parametric basis (UNICEF, 2023). The China Residential Earthquake Insurance Pool covers earthquake-related risks there. Meanwhile, Thailand’s National Catastrophe Insurance Fund covers damages caused by floods, earthquakes and windstorms (OECD, 2015).

The Caisse Centrale de Réassurance of France covers risks related to floods, earthquakes, tsunamis, landslides, mudslides, avalanches, subsidence, cyclonic winds, and terrorism (SBI, 2021).

Such models are typically developed after a detailed assessment of the extent of risk, targeted beneficiaries (covered under the risk mitigation programme) or priority areas, and the degree of protection.

Challenges In Developing Disaster Insurance Models

However, when it comes to developing and implementing a climate and disaster insurance programme, most developing economies and emerging markets face several challenges, such as low income and/or affordability, lack of trust in the insurer, unsupportive regulatory framework, and lack of political will (ADB, 2019). A long history of dependence on humanitarian assistance and social safety networks also lessens political initiatives to adopt a climate and disaster insurance programme.

Disaster Insurance In India

In India, sovereign-led insurance is not uncommon. India has several globally acknowledged prime climate change adaptation strategies for the agriculture sector, such as the Pradhan Mantri Fasal Bima Yojana, the Weather Based Crop Insurance Scheme, and the Coconut Palm Insurance Scheme. However, India does not have a natural calamities-related insurance programme.

Natural calamities such as floods hamper the economy’s long-term development goals as large chunks of funds are diverted towards relief and rehabilitation of affected areas. A research report published by the State Bank of India in 2023 suggested that the estimated economic loss due to floods in India ranges somewhere between INR 10,000 crore and INR 15000 crores, of which only around eight per cent was covered by insurance. In India, funds are allocated beforehand to counter natural disasters.

Based on the recommendation of the 15th Finance Commission, the Government of India has allocated INR 68,463 crore to the National Disaster Relief Management Fund (NDRMF) and INR 1,60,153 crore to the State Disaster Relief Management Fund (SDRMF) for the period 2021-22 to 2025-26.

In both funds, 80 per cent of the allocation is for disaster response, and the remaining 20 per cent is for disaster mitigation. The total fund released from the combined accounts of SDRMF and NDRMF in FY 2023-24 was INR 20,288.74 crore.

This year, the loss in Andhra Pradesh due to floods is estimated to be INR 6,880 crores, whereas the corresponding figures for Telangana are estimated to be INR 10,300 crore. With Gujarat, Tripura, Kerala, Assam, and other flood-affected states combined, this year’s total loss is expected to surpass last year’s losses.

Time For A New Framework?

With increasing calamities such as floods, cyclones and incessant rainfall in India every year, policymakers must think beyond existing disaster funds and develop an alternative risk mitigation framework, possibly through the PPP model.

Such models can be created after assessing the extent of risk in focussed areas and vulnerable groups in society. Developing a financial risk mitigation model for weather catastrophes would be a step towards climate change adaptation initiatives and achieving India’s net zero carbon emission target by 2070.

Ideally, policymakers should consider a financial risk mitigation model in which most humanitarian relief for catastrophe-affected lives comes from disaster relief funds while the insurance programme covers economic losses. To start, the government may consider allocating a portion of the 20 per cent allotment towards risk mitigation funds in the NDRMF and SDRMFs to develop such a programme. It must be reiterated that developing a disaster risk mitigation strategy is not to replace the current arrangements but to complement the existing ones by taking the bulk of their load.

Options Ahead

One option for India to develop such a model is establishing an ex-ante market-based risk transfer instrument, also known as a parametric index-based insurance model. Unlike traditional insurance, the parametric index-based insurance model doesn’t rely on individual loss assessment. Instead, settlement is linked to specific weather or geological indices, like average rainfall, temperature, or the strength of an earthquake or storm. It is determined by the correlation between the event’s intensity and expected losses.

Payouts from such models are usually faster compared to centrally controlled funds. However, parametric index-based insurance models are not without challenges. The major challenge in such a model is “basis risk,” which is triggered if a specified parameter or a particular threshold in the index is not met during a disaster. In this case, the insurer would refuse an insurance payout or only pay a part of the amount.

Several pilots have been carried out in the last few years by different entities such as the State Government of Nagaland through its SDMA (2021-2023), independent groups such as the Self-Employed Women’s Association (SEWA) in Maharashtra, Rajasthan, and Gujarat; and the Kerala Co-operative Milk Marketing Federation. The Nagaland model undertook its first pilot in 2021 but was largely unsuccessful, as the initial risk assessment was undertaken based on old data. Nonetheless, since then, the State Government of Nagaland has done extensive groundwork and is preparing for a second pilot. Taking a cue from Nagaland, Indian policymakers should encourage similar pilots in other states to understand the viability of such a strategy and its challenges so that a customised plan can be developed.

Another option for policymakers would be to develop a regional catastrophe pool for states facing similar kinds of calamities every year. For example, both Andhra Pradesh and Odissa are affected by storms and cyclones yearly, and most of the North East Region (NER) is affected by heavy rainfall and floods. At the same time, landslides and river flooding have become common in Himachal Pradesh and Uttarakhand lately. Such states facing risks from similar disasters could pool resources per the quantum of risk, retain some risk, and transfer the rest of the risk to insurance companies.

This option would allow for risk diversification and a more extensive risk cover at better rates, attracting more insurance companies. Participating states can standardise their contingency plans by establishing regional risk pools, leading to better post-disaster response and accountability. This approach also encourages fiscal responsibility and operational discipline, as funds for recovery are released based on a consistent, rule-driven framework.

Conclusion

Following either strategy would require the government to undertake thorough groundwork, update granular data on weather and geographic conditions, and use a scientific method to underwrite risk and estimate loss from a catastrophe for geography. Most importantly, this would ensure better coordination between the Centre and states, which can only be achieved through a political willingness to think outside the box.

Arindam Goswami and Nirupama Soundararajan, co-founders and partners at Policy Consensus Centre, New Delhi wrote this article.

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The post India’s Rising Flood Costs Need An Insurance Solution appeared first on The Commune.