The promise and pain of insuring natural disasters at the state level

While claims and compensation for victims are settled expeditiously, the pressures on revenues prevent many states from making top-up contribution to the SDRF and NDRF

Indian States are leaning on insurers to finance their payouts when natural calamities like floods, or drought strike, in an experiment that has been blessed by Irdai.

The experiment has drawn top global re-insurance companies such as Swiss Re to hand hold the states. “Insurance provides the best coverage for infrequent events of high severity that cause significant losses," noted Thomas Haller, Head of South East Asia, Public Sector Solutions, Swiss Re in an email response to Business Standard.

One of the first states to begin this experiment was Nagaland in 2020. Last year, West Bengal and Tamil Nadu also joined. West