An industry that is insured for ₹ 1,000 Crores with a Premium of ₹ 50 Crores, that is shared by A, B and C Insurance Companies, the detail is as follows: Insurer Share Sum Insured Premium A 35% ₹ 350 Crores ₹ 17.50 Crore

CS Professional · Banking and Insurance - Laws and Practice · PYQS · June 2026
An industry that is insured for ₹ 1,000 Crores with a Premium of ₹ 50 Crores, that is shared by A, B and C Insurance Companies, the detail is as follows: Insurer Share Sum Insured Premium A 35% ₹ 350 Crores ₹ 17.50 Crores. B 25% ₹ 250 Crores ₹ 12.50 Crores. C 40% ₹ 400 Crores ₹ 20.00 Crores. The loss occurred of ₹ 200 Crores. Calculate the claim payable by each company to insured.

Answer & Explanation:

The total sum insured is ₹ 1,000 Crores. The loss occurred is ₹ 200 Crores. The formula to bear the loss is: (Total Loss × Share of Sum Insured) / Total Sum Insured. However, the table already provides the 'Sum Insured' for each insurer, which represents their share of the total insured amount. So, the claim payable by each company will be their proportionate share of the loss based on their sum insured. Claim Payable by A: = (₹ 200 Crores / ₹ 1,000 Crores) × ₹ 350 Crores = 0.2 × ₹ 350 Crores = ₹ 70 Crores. Claim Payable by B: = (₹ 200 Crores / ₹ 1,000 Crores) × ₹ 250 Crores = 0.2 × ₹ 250 Crores = ₹ 50 Crores. Claim Payable by C: = (₹ 200 Crores / ₹ 1,000 Crores) × ₹ 400 Crores = 0.2 × ₹ 400 Crores = ₹ 80 Crores. Total Claim Payable: = ₹ 70 Crores + ₹ 50 Crores + ₹ 80 Crores = ₹ 200 Crores. This matches the total loss occurred.

Topics: Insurance Claims

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