1. Role of Insurers & Reinsurers in achieving the objectives of National Policy on Disaster Management Embedding insurance products into Disaster Management Policy August 11, 2010

2. Presentation Path Segmentwise Approach Impact of Disasters Implementation Roadmap

3. Industrial Risks Loss or damage to Fixed Assets like Buildings, Plant & Machinery, Furniture & Fixture, etc Loss or damage to stock in godowns, in transit and at manufacturing sites, etc Consequential losses Non-Industrial Risks Loss or damage to Household property, Motor Vehicles, Shops, Offices, Hotels, Educational Institutes, etc Impact of Disasters - Property Risks

4. Death or permanent disability Loss of earning capability for self & family Loss of Health Temporary : Fracture, injury, etc or outbreak of diseases post catastrophes Chronic : Exposures to toxic materials leading to chronic illness Unemployment Agricultural risks Crop Livestock Impact of Disasters - Personnel Risk

5. Worldwide Disasters – Insurance Contribution YearNo of Catastrophe s No of fatalities Total losses (USD bn) Insured losses (USD bn) % Insured losses 2005397 97,0002308336% 2006349 31,000481633% 2007335 21,500702840% 2008311 246,0002695219% 2009288 15,000622642% Source : Swiss Re Sigma The proportion of insured losses in underdeveloped and developing Economies tends to be even lower

6. Disasters in India – Insurance Contribution CatastropheYearEstimated economic loss ($ mn) Estimated insurance loss ($ mn) % Insured losses Gujarat Cyclone199990020022% Gujarat Earthquake 20012,0001508% Mumbai floods20052,50065026% Low insurance penetration impacting Public finances Source : Market information

7. Government Relief Funds Various forms of local and international aid Pooling arrangements Partly subsidized by Government Insurance / Reinsurance Alternative Risk Transfer solutions Index based instruments Funding Disaster Relief

8. Presentation Path Segmentwise Approach Impact of Disasters Implementation Roadmap

9. Risk profiling Typical disaster event profile of non- disaster prone areas Disaster events do not have this risk profile Typical disaster event profile of disaster prone areas Severity Low Severity High Frequency Low Frequency High

10. Segment : Property Risks Terrorism Risk Insurance Pool Fire insurance Nuclear pool Micro-asset insurance (Indonesia) Cat Bonds (Japan) Severity Low Severity High Frequency Low Frequency High

11. Target Segment Insuring population Perils Covered Terrorism Managed by GIC Coverage Property Sum Insured subject to maximum liability as defined in the pool agreement Risk transfer through voluntary domestic reinsurance and international reinsurance Indian Terrorism Pool

12. Target Segment Householders Perils Covered Earthquake, Volcanoes, Tsunami Managed by Government Coverage 30-50% of SI for Fire subject to maximum of 60 Mn Yen per risk (equi. INR 32 Mn) Various percentages of claim amount payable by the Government depending on the size of claim Risk transfer through Cat Bonds Japanese Catastrophe Pool Program

13. Target Segment Low income households Perils covered Floods Managed by Insurance Company backed by International reinsurers One Manggarai Protection Card costs 50,000 Indonesian Rupiah(IDR) (equi. INR 260) and guarantees a one-off payment of IDR 250,000 (equi. INR 1300) if waters rise to or above 950 cm at the Manggarai Water gate in Jakarta Indonesian micro-asset insurance

14. Significant underinsurance prevalent Corporate Lower sum insured taken by choice with consequential losses largely not insured Adequacy of insurance verified through Audit certification Personal lines Significant under penetration – for e.g. in home insurance and shopkeeper insurance Quantification through Registration authorities, Property / Municipal tax authorities, Home Loan data Control through Banks and registration authorities Property insurance – Policy Measures

15. Segment : Personnel / Agricultural Risks Accidental Risks Health insurance risks (RSBY / Aarogyashree) Weather insurance Central American Government securitization scheme Severity Low Severity High Frequency Low Frequency High

16. Target Segment Indian Farmers Perils Covered Rainfall Deficit Managed By Governments with Indian Insurers Coverage Index based trigger - benefit policy Quick release of funds thereby providing speedy relief Mandatory for loanee farmers Weather Insurance

17. Target Segment Central American Government Perils Covered Earthquake Managed By Reinsurance major Coverage details Payout based on the size of the population affected by a specific earthquake For example, $1 million of donations or government funds can be used to secure contingent disaster relief funds in the amount of $45 million Risk transfer to capital markets through securitization Central American Govt. Securitization

18. Government subsidy for Weather insurance and life & health coverage of BPL population Measures for exposure evaluation collection of data on population density modeling its vulnerability in various disaster event scenarios Agriculture risks Crop underinsurance evaluated through Government land records and loanee farmers Personnel Insurance – Policy Measures

19. Presentation Path Segmentwise Approach Impact of Disasters Implementation Roadmap

20. Key enablers Product Innovation Enrollment a key challenge given the dispersion of insured members Smartcard based technology providing a breakthrough Policy measures to encourage insurance through paperless technology Efficient servicing of insurance scheme Ability to collect, store and use data through intelligent data mining techniques Government efforts at building infrastructure for better risk management Risk Zoning of Areas

21. Thank you