Page 21 - Insurance Times May 2020

11. IT / Software;
12. Aluminum / Copper / Zinc.

During December, 2019 GIC Re had issued Fresh Mid Term
endorsements dated 10/12/2019 to Indian Insurers'
PROPERTY Reinsurance Treaties - mandating compliance of
following underwriting practices in Fire department for
Polices of SFSP / IAR / Mega Risk commencing on or after
01/01/2020.

1. Fixed FLEXA Rating Regime for All
Occupancies of AIFT:
a) FLEXA Rates for All occupancies of AIFT shall be the
use of direct distribution networks, and customers are FLEXA Loss Cost Rates published by Insurance
beginning to opt for new and alternative channels, such as Information Bureau of India (IIB) vide Schedule 3
Internet and mobile. This is helping insurers to increase their dated 21st November 2019 or any future revision
reach, and enhance customer satisfaction, but distribution to these rates by IIB. There shall be No Discount
costs often remain high. allowed on these FLEXA Rates published by
Insurance Information Bureau of India (IIB). This IIB
Mainly the positive aspect for the Fire Line of Business is FLEXA Loss Cost Schedule 3 contains the detailed
that the Indian Fire Reinsurance Market remained always description in the following columns:
very lucrative for the Reinsurers and Reinsurance support
for the Fire Portfolio covering for Indian Properties are very Sr. No. IIB Occupancy IIB Occupancy Loss Cost
structured. Proportional Reinsurance products like Quota Code Description
share & Surplus - both are available from the Reinsurers of
Indian Market even thereby allowing the profit commission
by the reinsurers to the cedent. In such situation to make - covering all Fire Risks being depicted in same fashion
the Fire Portfolio profitable again an initiation is taken & as as per the erstwhile AIFT / Guide Rates as:
evidenced by the introduction of uniform Fire Rating by all SECTION III - Dwellings/Offices/Hotels/Shops, etc., located
the insurers. outside the compounds of Industrial / Mfg.
Risks;
Introduction of new tariff in Fire SECTION IV - Industrial / Manufacturing Risks;

Insurance is significant positive move: SECTION V - Utilities outside the Compounds of Industrial /
Tariff firstly came back during the last quarter of 2016-17 Manufacturing Risks;
for the risk above Rs. 500 Crores (PD + BI) in a single location SECTION VI- Storage Risks outside the Compounds of
involving following Mega 12 risks as below: Industrial / Manufacturing Risks;
1. Thermal Power Plant;
SECTION VII- Tank firms / Gas Holders outside the Compound
2. Combined Cycle Power Plant; of Industrial / Manufacturing Risks.
3. Pharmaceuticals; b) It may be recalled that Insurance Information
4. Steel; Bureau of India, which is an organ of IRDAI, has
been publishing FLEXA Loss Costs (Burning Costs)
5. Automobile Industries;
since 2015, once in every two years, for various
6. Chemical - Fertilizers; Risk Occupancies, based on entire industry level
7. Airports; data collected from Indian Insurers and they reflect
the Uniform Pricing needed for each of the
8. Cement;
occupancies. The Loss costs indicated in IIB
9. Paper; schedules are pure FLEXA costs and do not include

10. Tyre; STFI price.

The Insurance Times, May 2020 21