Mines closure takes a toll on insurance premium collection

The state government’s stringent measure to curb illegal mining has taken a toll on the premium collection of the general insurance companies in the state in 2011-12.

The collection of premium on heavy commercial vehicles by various non-life companies in the state are down by about 15 per cent compared to the previous fiscal.

“There has been significant drop in the premium collection in 2011-12 as most of the truck remained off roads due to closure of mines in the state,” said a top official at the Bhubaneswar Regional Office of National Insurance Company, a public sector general insurance firm.

 

About 30 per cent of the company’s business in the state comes from the commercial vehicle segment in Joda, Barbil and Koida areas - the mining belt of Keonjhar and Sundargarh districts.

Out of the total 600 mines in the state, only 119 mines are operational now. While 242 non working mines are suspended, the operation in 155 non working mines is temporarily discontinued.

It may be noted that the state government had been in a tizzy at the arrival of national level illegal mining investigative agency M B Shah Commission late last year and had taken a series of measures including complete closure of transport of mineral for export purposes.

Over 15,000 trucks are engaged in the transportation of minerals in Keonjhar and Sundergarh districts. The government had put restrictions on their movement to check illegal mining and theft of iron ore and other minerals. Industry sources say the total premium collection on the commercial vehicle amounts to more Rs 100 crore in Orissa out of total premium collection Rs 600 crore. Public sector general insurance provider Oriental Insurance Company that enjoys 31 per cent market share in the state has also witnessed a similar trend in decline in premium collection. “Out of total business from the commercial vehicles segments, 50 per cent of business comes from these mining belts. Particularly, in the last fiscal the segment has witnessed a negative growth of 15 per cent compared to 2010-11 due to the closure of the mines in Rourkela, Keonjhar and Barbil regions,” said a top official of the Oriental Insurance Company.