HE'S the world's richest god and going by the number of pilgrims visiting his abode, he could arguably be the most powerful one too. The value of his worldly possessions seems to be almost half the size of the Andhra Pradesh state budget of 1 lakh crore. And the onus of protecting his worldly possessions rests with the trust manning his abode.

To protect this asset, the Tirumala Tirupati Devasthanam (TTD) board has decided to buy insurance cover on the jewellery of Lord Venkateswara, valued at around 52,000 crore. The decision will throw open the country's biggest gold insurance market. "No single insurance company can underwrite such a risk on its own books...," said a senior official of a large nonlife firm. The board is looking at partnering with a state-owned general insurance firm for insuring these assets. The insurer who gets the mandate will have to strike a reinsurance deal with an international reinsurer.

Every day, close to 70,000 devotees visit Tirupati Balaji temple. In many cases the donations are unusually generous. Karnataka minister Gali Janardhan Reddy, for instance, had offered a diamondstudded crown worth 42 crore to the god last year.

The temple owns about 20 tonne of gold and diamond jewellery and some of them date back to the 12th century. "We have decided to take insurance cover for these valuable assets. Considering that some of these jewellery come under the antique category, it will be insured based on its historical value. Currently, we are in the process of assessing the exact value at which these assets can be insured and we have an in-house team looking into it. Only after the completion of the valuation process we can go for an insurance cover and then we will decide on the formalities for selecting the insurance company," said a TTD official.

Despite TTD's efforts, insuring the wealth of Tirupati Balaji seems to be a mammoth task and has remained an unfulfilled wish. Insurance experts say the premium can be quite high considering the risks involved and antique characteristics of the assets. Arriving at antique value of jewellery can be a huge challenge for TTD as they need to have documentation to prove historical significance.

TTD assets likely to be valued at over $10 billion
INSURERS say if all the gold is in one place, it would require reinsurance support and this might call for surveys. TTD is still at a stage where it is trying to estimate the value and would only then hold discussions for a cover. Usually, government departments proceed on their insurance plans by issuing an RFP (request for proposals) followed by submission of bids.

Though TTD is yet to come out with exact valuation of the assets to be insured, preliminary data shows it could be over $10 billion. This can be considered as the largest in terms of assets in a single location, considering that over 80% of the valuable assets belong to the sacred temple of Sri Venkateswara located on the seventh peak, Venkatachala (Venkata Hill) of the Tirupati Hill. TTD maintains 12 temples and their sub-shrines.Till now, ONGC with assets spread in several locations, has the largest insurance cover of $26 billion.

In fact, the board's decision to insure the gold comes in the backdrop of many alleged reports of jewellery pilferage. Last year, the head priest of a Tirupati temple had confessed to stealing 520 gm gold necklace of a Venkateshwara deity. He had pledged it for Rs 10 lakh to get his daughter married.

Earlier this year, TTD officials admitted that there were no documents on the jewellery of Sri Krishnadevaraya period of 1500 AD. And many believe some of these antique jewellery might have even been converted into other ornaments.

"This is the first time TTD is planning to insure these assets and most people know that it is a result of the pilferage. It will be difficult to assess the historical value of these items unless the board has the expertise in calculating it as per globally accepted practises. When insurance companies evaluate the value of these assets, they will look at the risk associated with the insured item and the premium may go up accordingly," said an insurance industry expert.

"Most insurance companies have guidelines to assess the historical value of items. In order to insure antique jewellery, it is important for the insurance company and the board to reach a consensus on the value of these items to calculate the premium," said SL Mohan, General Insurance Council.

According to him, globally, while insuring an antique item, insurance companies will not take the responsibility of replacing it if the item is stolen or missing. "It is for the custodian of that item to protect it from theft. Insurance companies can just provide a risk cover, commensurate with the historical value of the item. For instance, if a company insures the painting of Pablo Picasso for a sum, they are not thinking of replacing it in case of an eventuality. The insurance company can just pay an amount as possible risk cover," he said.

Source: TNN