A.M. Best said it does not expect flooding in the Indian state of Kerala to have a significant impact on the balance sheet strength of rated Indian non-life insurers; however, the losses may add to the unfavorable underwriting performance that A.M. Best has flagged as a negative rating factor for some of these insurers.
In a Best’s Briefing, titled, “Kerala Floods: Limited Impact on Rated Insurers’ Capital, May Add to Performance Issues,” A.M. Best notes that Kerala represents a significantly smaller portion of the Indian non-life market and A.M. Best rated insurers’ overall gross premiums. Additionally, insurance penetration in India is low and insurance penetration in Kerala is estimated to be below the national average, the ratings agency noted.
In the 2018 summer monsoon period in Kerala, cumulative precipitation was significantly higher than normal in this year, and severe floods occurred in the region with the release of waters in dams.
Best of all, he said he expected the fire and the engine to be the most affected area of work. Engine damage is one of the most important business resources that account for 30 percent of the gross premiums of the state. In 2017, four major insurance companies, writing about 70 percent of Kerala’s gross non-life premiums, are likely to meet most of the claims.
The best is that the rates of affected insurance companies are expected to have deductible reinsurance protection, which is the smallest percentages of the premium base and capital sizes.
Legal warning !
The information, comments and suggestions there are not covered by investment advice. It is based on the author's personal opinions. These views may not fit your financial situation and risk and return preferences. For this reason, based solely on this information, investment decisions may not have the appropriate consequences for your expectation. Our Site is not responsible for any direct or indirect damages incurred by the investors as a result of the use of the information on the Site, deficiencies in the sources, damages incurred by profit, moral damages, or damage to third parties.