The Indian Government is reportedly looking into a pool-like structure that would offer natural catastrophe insurance coverage for perils such as floods, earthquakes, cyclones and landslides.
A pool style scheme has been the topics of discussions for several years in India now, but plans have yet to be realised due to a lack of consensus on the exact structure it would take.
But after the devastating impact of Cyclone Amphan last month, the government is now keen to move ahead with the risk pool, sources told Money Control.
“After Cyclone Amphan, a consensus is emerging that there should be a cover for dwellings and physical belongings during a natural catastrophe,” one official told the publication. “Traditional insurance products may not fit to cover events of such a large scale.”
It is anticipated that both the central and state governments would contribute to the catastrophe pool, alongside large re/insurers in the public and private sector.
Similar systems have already been implemented in India to ensure capacity is available for claims related to nuclear risks and terrorism.
Cyclone Amphan, which hit the Indian states of West Bengal and Odisha on May 20th, is expected to cause Rs 1 trillion (US $13 billion) of damage, and Rs 350 crore ($47 million) of insured losses, according to initial estimates.
