Many of the thousands of buildings flattened by last Friday’s earthquake in the Indian state of Gujurat are insured, although the total payout is expected to be modest by international standards. Shoddy building practices and lax regulations have contributed to the massive damage.

About 10% of the estimated 25,000-50,000 killed in the quake – which registered 7.9 on the Richter scale – had their lives insured with the state owned Life Insurance Corporation (LIC), which has 115 million policyholders.

Property insurance policies were available in Gujurat, but India is generally regarded as under-insured. That’s one reason the Indian government has asked the international community for $US1.5 billion to rebuild whole towns and villages.

In the face of such mass destruction, there is some good news for insurers and the national economy: Gujurat’s industries – mainly chemical, textile and pharmaceutical factories and petroleum refineries – emerged relatively undamaged from the quake.