Rasuwa flood leaves insurers facing NRs 25.87 billion in claims

Insurance claims arising from the devastating flood in Rasuwa have reached NRs 25.87 billion, marking the largest volume of claims recorded following a single disaster in Nepal, according to preliminary data from the Nepal Insurance Authority.

As of August 31, a total of 583 policyholders had filed claims with 14 non-life insurers and one microinsurance company. The figure is already higher than the approximately NRs 23.5 billion in claims reported following the September violence earlier this year.

The claims are expected to increase further as insurers complete damage assessments and additional policyholders report losses.

Engineering and contractor-related insurance accounts for the largest share, with 52 policyholders seeking around NRs 20.5 billion in compensation. The claims are largely associated with damage to hydropower projects and related infrastructure along the Bhotekoshi and Trishuli corridors.

The Oriental Insurance Company has recorded the highest financial exposure, with eight policyholders filing claims worth approximately NRs 13.04 billion. Shikhar Insurance has received the highest number of claims, with 127 policyholders seeking about NRs 1.87 billion.

Property insurance claims stand at NRs 2.34 billion from 113 policyholders, while motor insurance claims have reached NRs 1.55 billion from 313 policyholders. Transport insurance claims total around NRs 897.7 million, while other categories account for NRs 529.2 million. 

Meanwhile, the death toll has surpassed 1,000 as of Tuesday with around 4,000 still missing. According to the authority, health insurance claims worth NRs 41.6 million have been filed so far.

Hydropower sector bears the brunt
The flood inflicted extensive damage on the hydropower sector. According to the Independent Power Producers’ Association, Nepal, 12 hydropower projects with a combined capacity of around 700 MW were affected in Rasuwa and Nuwakot. Seven of the projects were operational, four were under construction and one was in its trial phase.

The disaster also damaged transmission lines, homes, farmland and livestock, while disrupting commercial activity around the Rasuwagadhi border crossing. Hundreds of new cars and cargo containers were swept away at Rasuwagadhi border point Timure, adding to the economic impact of the disaster. Reports out the number at over 500 new vehicles and around 150 containers at Timure alone.

Rescue and recovery efforts have been complicated by damaged access routes and difficult terrain, with a large number of people reported missing from affected hydropower project sites.

Experts have suggested that a glacier collapse in the Langtang Lirung area may have contributed to the flood, based on preliminary satellite-image analysis.

Insurers expect claims to rise as assessments continue, particularly from hydropower, infrastructure, commercial property and transport assets. The current NRs 25.87 billion estimate is therefore likely to be only an initial measure of the disaster’s eventual insured losses.