Reinsurance rates may rise in April renewals

[Manish_Kumar]

Reinsurance rates in the Indian market could rise when they come up for renewal in April even though the rates in the international market have softened.

The reason — general insurance companies are staring at huge claims arising from the inferno that engulfed IOC's storage depot in Jaipur and the Kota bridge collapse. Besides, these companies continue to underwrite business at huge discounts, say industry players.

While international insurance renewal takes place on January 1, in India, the renewals happen only in April. Generally, the renewals in the international market have a bearing on renewals happening in the domestic market.

This year the renewal premiums have gone down by 5-10 per cent in the international reinsurance market as there were no major losses. Besides, international re-insurers have seen increased reinsurance capacity this year on higher investment incomes after the capacity shrank last year.

The reinsurance capacity of global re-insurers had taken a hit in 2008 as investment income of the companies came down due to the financial crisis.
Source - thehindubusinessline.com (http://www.thehindubusinessline.com/2010/01/28/stories/2010012851380700.htm)

[Expert]

IOC Fire at Jaipur
The Indian Oil depot at Jaipur, has been insured for Rs.230 crore. The primary insurer for the property is ICICI Lombard General Insurance (50%), followed by Oriental Insurance (25%) and others including IFFCO Tokio and state insurers. Reinsurance for large part of this cover is provided by GIC Re. The total claim payable and share of each of insurers & reinsurers would depend on terms and conditions of the cover and reinsurance treaty.

Taj Hotel - 26/11
Indian Hotels has indicated in a filing to BSE that that has received Rs.130 crore till date as an ‘on account’ payment towards business interruption and property damage claim. The lead insurer for Indian Hotels was Tata AIG General Insurance, followed by ICICI Lombard and IFFCO Tokio.

This is the main reason. Plus, India is on the top in terrorism activity.

[mrinalrulz]

This is the main reason. Plus, India is on the top in terrorism activity.
One reason may be because common wealth games are go to be held in India and if some terrorist activity like Mumbai - 26/11 happen. Why reinsurer take risk?

[Master]

This is the main reason. Plus, India is on the top in terrorism activity.

One reason may be because common wealth games are go to be held in India and if some terrorist activity like Mumbai - 26/11 happen. Why reinsurer take risk?
Reinsurer take care all the risks from terrorist to natural calamity to political risks. So don't limit them with only one. Second 26/11 is one thing which happen once in many years. And no country have any control in terrorist activity. But yes, it will have big impact on the premium.