“While a clearer picture would emerge in next few days it could in all probability be much higher" than the current industry estimate, said M. Ravichandran, president of Tata AIG General Insurance Co., who says the filings could be the highest in India since at least 2005. “Claims on damaged motor vehicles and business establishments will form majority of the insurance claims.”

Small and medium enterprises, automobile manufactures, utility service providers and information technology companies are among sectors most affected, he said. Insurers received claims for about 5 billion rupees 15 days ago, he said, which was before the floods.

Monsoon rains

The fourth-biggest Indian city contributes about 3% of the nation’s gross domestic product, with the metropolitan area’s manufacturing industry accounting for 1.5 trillion rupees, according to research by SMERA Ratings Ltd., a partnership between Small Industries Development Bank of India and Dun & Bradstreet Corp. Small industries could potentially lose 8.4 billion rupees a week because of the floods, it said.

The city had a record 1,218.6 millimeters of precipitation in November, three times more than normal, and 506 millimeters this month through Dec. 5, according to forecaster Skymet. The northeast monsoon typically sets in between October and December over India’s east coast, where Chennai is located.

“An impact from such a natural calamity will have serious ramifications on not only the local but national level,” SMERA said in an e-mail response to a query. “These estimates are conservative and the financial impact can double with every week of business foregone.”

Too early

Chennai and its surrounding areas are home to many manufacturers, including Hyundai Motor Co., Ashok Leyland Ltd., Renault SA and Daimler AG. Eicher Motors Ltd., the maker of Royal Enfield motorcycles, said the showers severely affected its facilities, offices and staff, disrupting logistics and supply chain. In November, it lost production of about 4,000 bikes, it said.

Ford and Renault said they resumed production at their units in the outskirts of Chennai on Monday, though the attendance was thin. Tata Consultancy Services Ltd., India’s biggest software maker, said it doesn’t expect all its employees to report to work after reopening. Cognizant Technology Solutions Corp. said its offices are open and business was “as usual.”

Insurers and re-insurers will share the burden of the claims payouts, ICICI Lombard’s Datta said. Home insurance is very rare in India and the claims on damages to houses and apartments will be low, said TATA AIG’s Ravichandran.

It is far too early to give estimates on the losses and claims from the event, Munich Re and Swiss Reinsurance Co. said in separate e-mails.

“As all insurers have re-insurance in case of claims above a certain limit, the net hit on them may amount to few billion rupees although the overall pay-out could be in the range of tens of billions," Ravichandran said.

--With assistance from Siddharth Philip and Ganesh Nagarajan.

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