Press Release - SEPTEMBER 14, 2018
Best’s Briefing: Kerala Floods Likely to Have Limited Impact on Rated Insurers’ Capital, But May Add to Performance Issues
FOR IMMEDIATE RELEASE
SINGAPORE - SEPTEMBER 14, 2018
In a new 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 cumulative rainfall this year during the 2018 summer monsoon period in Kerala was significantly higher than normal, and together with the release of waters from dams, created severe flooding in the region. A.M. Best expects fire and motor to be the most impacted lines of business. Motor own damage is one of the leading sources of business, accounting for 30% of gross premiums in the state. Four large insurers, which wrote an estimated 70% of Kerala’s gross non-life premiums in 2017, are likely to absorb the majority of claims. The affected insurers rated by A.M. Best are expected to have adequate reinsurance protection, with deductibles that are small percentages of their premium base and capital sizes. A.M. Best will continue to closely monitor developments at its rated insurers as more information becomes available on the ultimate gross and net impact of the floods on their profitability.
To access the full copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=278075 .
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.