GIC preparing 'hazard map' to identify disaster-prone areas

In the wake of the Uttarakhand floods, India's national reinsurer General Insurance Corporation(GIC Re) said it is preparing a "hazard map" to identify areas which are more prone to disasters.

The map will take around six months to prepare and once ready, could be used by insurance companies to assess their exposures in such areas and build the risks into their pricing.

"Kedarnath is a wake-up call. Nature has its own way of dealing with things. We have to learn to live with hazards and natural disasters," General Insurance Corporation chairman and managing director Ashok K Roy said here.

Talking to the reporters on the sidelines of ICC Insurance Summit, Roy said the idea of preparing the map was on the drawing board stage for quite sometime and the implementation happened recently.

He said the reinsurer engaged an external research team, which was working along with Indian space agency Indian Space Research Organisation (ISRO) to prepare the map.

According to him, the company would insist on proper implementation of the codes for construction in the country's disaster prone areas in order to avoid mass devastation.

"The premium for insuring properties in those areas may be higher and there could be a mechanism whereby insurance companies can refuse claims if insured entities don't follow rules," Roy said.

The country's general insurance industry was estimated to incur losses to the tune of Rs.3,000 crore to 4,000 crore against claim settlement towards 240-odd damaged hydroelectric power projects in Uttarakhand following the unprecedented disaster.