Regulator plans to start CAT insurance pilot scheme

The IRDAI is working on a plan to launch government-funded catastrophe (cat) cover for the poor segments of society. The project will start as a pilot scheme in selected states.

IRDAI has written to the central government seeking approval for the project, reported Indian Express quoting a senior IRDAI official.

In India, most losses from catastrophes and man-made disasters were uninsured. For example, the severe flash floods in Chennai in 2015 caused estimated economic losses of $2.2bn, but insured losses were estimated at around $755m. At present, the central government and the state governments provide relief for the huge losses incurred in natural disasters, burdening public coffers.

Insurance experts say most losses suffered in natural disasters are uninsured, for reasons such as lack of purchasing power, lack of interest in insurance and ignorance of availability of such covers.

Source: Asia Insurance Review