The Hindu Business Line : HDFC Chubb plans weather cover

WEATHER is the most talked about topic in the world, whether one is commenting on good weather or bad weather. While good weather doesn't cause financial hardship, bad weather can ruin a normally successful function or business.

In the Indian context, it can make or mar the economy given the huge influence on agriculture. And this is what has led HDFC Chubb General Insurance Company to pause and explore its options.

"The company does not have a weather insurance product in the market right now. However, it is evaluating the feasibility of launching one in the near future," said Mr Shashwat Sharma, who is responsible for rural insurance at HDFC Chubb.

At the grassroots level, over 65 per cent of the Indian population is engaged in agricultural activities. Weather volatility is the single most pertinent risk on the yield of crops.

Data hav;e been collated that correlates 90 per cent of crop failure to deficient or excessive rainfall. By implementing weather insurance schemes, the vulnerability to such risks can be reduced for a large section of our society.

The vagaries of weather virtually affect every industry, said Mr Sharma. Some of the industries other than agriculture that are more susceptible to weather are: Energy and utilities: - (a) hydro power plants affected by lack of rain from rain-fed rivers, energy companies affected by reduced power consumption because of cooler than expected summers; (b) Food and milk processing: - fall in cold drink sales due to cool summer, low milk production due to poor quality fodder in a hot summer and inadequate rainfall; (c) Tourism - weather conditions affecting tourist spots; and (d) Entertainment and events - disturbance in events such as sport, fair, festival, carnival, concerts or air show on account of weather.

All these can be brought within the ambit of weather insurance by objectively defining the parameters.

On whether specific covers are possible for eventualities such as a tsunami or a super storm, he said that these are catastrophic risks and are typically covered within the scope of property or fire insurance.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
S&P upgrades foreign currency rating

Upgrade propels rupee to 5-year high

Indian Bank Q3 net falls on provisions

New plans from MetLife India

HDFC Chubb plans weather cover

RBI prescribes norms for merger of UCBs

Dhanalakshmi Bank to open branches at Tirupati and Nellore

South Indian Bank to double farm credit

Chidambaram open to micro-finance regulator

IIEL ties up with Henry Butcher

LVB plans rights issue, bonds to hike capital