Page 5 - Insurance Times February 2021

General Insurance

Crop insurance to cover IRDAI keeps obligatory the Atlantic caused $76 billion in

damage by wild animals cession at 5% to GIC Re insured losses during 2020, Swiss Re
said.
Farmers facing damage to their crops IRDAI has maintained the obligatory The 40% increase from $54 billion in
due to attack by wild animals can now cession of each general insurance 2019 dwarfed the $7 billion in man-
file for claim under the central flagship policy that is to be reinsured with an made losses during 2020, the
crop insurance scheme. The Indian firm at 5 per cent for FY21. reinsurance company said in its sigma
participating states will have to notify "The percentage cession of the sum estimate for the year.
add-on coverage under the Pradhan insured on each general insurance The total insurance industry losses of
Mantri Fasal Bima Yojana (PMFBY) for policy to be reinsured with the Indian $83 billion made 2020 the fifth
such crop loss which can be assessed reinsurer(s) shall be 5 per cent in costliest year since 1970, the company
at individual farm level in a village or respect of insurance attaching during said.
panchayat. the financial year starting April 1,
2021, till March 31, 2022, except the "Losses were driven by a record
The National Board of Wildlife (NBWL) number of severe convective storms -
- apex body which takes a call on terrorism premium and premium thunderstorms with tornadoes, floods
development projects in and around ceded to Nuclear Pool, wherein it and hail - and wildfires in the U.S.,"
conservation areas including national would be made 'NIL'," IRDAI said. Swiss Re said.
parks and sanctuaries -had in its The entire obligatory cession has to be
standing committee meeting on reinsured with India's largest reinsurer, IRDAI calls for standard
January 5 approved an advisory for General Insurance Corporation of India travel covers
management of human-wildlife conflict (GIC Re). In a bid to simplify travel insurance and
(HWC) in the country, providing for Obligatory cession refers to the part of expand its reach in the country, IRDAI
states to utilise "add-on coverage the business that general insurance issued guidelines or insurers to come up
under the PMFBY for crop companies have to mandatorily cede with standard travel policies to be
compensation against crop damage to the national reinsurer, GIC Re. offered from April 1, 2021. These
due to HWC". Insurers have to cede 5 per cent of covers will have common benefits and
their premium on every general
Though the agriculture ministry has insurance policy sold to GIC Re. wordings across products launched by
given this choice to the states to different insurance players.
consider providing add-on coverage According to the exposure draft,
under PMFBY, all vulnerable states did Natural disasters cost insurers will be allowed to launch five
not opt for the provision. This even as insurance industry $76bn standard travel insurance plan variants
at least 10 of them invariably report Natural disasters like wildfires which under domestic travel and four plan
crop damage due to atack by wild devastated parts of the United States variants under overseas category. The
animals. and a record number of hurricanes in exposure draft spells out the coverage
The Insurance Times, February 2021