GIC Re moots common disaster mgmt platform for SAARC countries

Country's only reinsurance player GIC Re has called for a common disaster management platform for the SAARC nations to tackle the rising incidence of natural disasters in the region.
The objective is to increase the coverage of assets and reduce the mortality protection gap in the region.
"SAARC governments are keen to have a common platform to cover their assets against natural disasters," GIC Re Acting Chairman and Managing Director K Sanath Kumar told PTI.
He also said with a right product and institutional mechanism for distribution, the insurance industry can reach out to a large number of people who can buy protection.

"We need to revisit what is insurable and what is not."
Reeling out numbers, Kumar said while some developed countries have 77 per cent coverage against natural disasters, it is merely seven per cent in India and a paltry one per cent in Nepal. Similarly, mortality protection gap has grown with a ten per cent CAGR growth during the past ten years.

While the global coverage average is 30 per cent, it is only ten per cent for Asia as a whole, he said.
Similarly, in a recent report, the world's largest reinsurer Swiss Re had noted that while there was an increase in insurance coverage in the country, it had not been adequate to fill the protection gap.

On the mortality protection gap in the country, the Swiss Re report pegged the gap at a whopping USD 8,555 billion, as of 2014. It means that the protection gap per working person was USD 35,181 last year, with a ten per cent CAGR growth during 2004-2015.
Some of the natural disasters that hit the country and the SAARC region last year include the earthquake in Nepal, the devastating Jammu & Kashmir floods and the Hudhud cyclone in the coastal parts of Andhra Pradesh and Odisha.
Across the region, be it in India, Bangladesh, Nepal or Sri Lanka, the frequency of natural disasters is on the rise, Kumar said, and pointed out that there are also many man-made reasons behind them. "We have to find ways to tackle all these problems in a holistic manner", he said.

Insurance Regulatory and Development Authority (IRDA) Chairman T S Vijyan had recently expressed concerns on the huge gap in the coverage of assets in the general insurance sector.
Calling for government support to make people buy insurance products against natural disasters, GIC Re General Manager Alice Vaidyan said the main reasons for low penetration is affordability issue, coupled with low awareness and lack of government support.
Vaidyan hoped that the proposal to create a common institutional platform to insure natural disaster risks in the SAARC region, mooted way back in 2005, can be revived and executed soon.