Page 8 - The Insurance Times June 2025

ket share for general insurers rose to tegic shift in how businesses approach ing by reinsurers. She added, "There is
91.02%. risk." already an increased demand for
Coverage levels vary by enterprise size: standalone war covers, though avail-
Demand for D&O Liability for small firms, sums insured range ability may be limited in the short
term."
Insurance Soars 25-35% in between Rs. 50 lakh and Rs. 2 crore;
mid-sized firms opt for Rs. 2-10 crore; Experts expect heightened scrutiny of
FY25 while large corporates typically insure marine and aviation treaties involving
Directors & Officers (D&O) liability in- for over Rs. 10 crore. Premiums range cross-border exposures. Reinsurance
surance witnessed a 25-35% surge in from Rs. 1-5 lakh for mid-sized busi- premium rates and demand for terror-
demand during FY25, driven by height- nesses and exceed Rs. 5 lakh for large ism and political violence covers could
ened board accountability, regulatory entities. also see upward revisions, especially if
scrutiny, and investor activism, accord- geopolitical tensions intensify further.
ing to data from Policybazaar. The in- War Risk Premiums May As insurers adapt to increased risks, the
crease reflects growing awareness Rise Amid Indo-Pak Ten- short-term impact may include more
among start-ups, promoters, and mid- stringent underwriting and higher
sized firms regarding personal liability sions costs for clients in sensitive sectors.

risks faced by senior executives. Insurance experts warn that war risk
premiums in the marine and aviation
Renewal rates for D&O policies re- Insurers Worry Over Delay
mained strong at around 85%, with sectors may spike if tensions escalate in Motor Third-Party Pre-
minimal discontinuation, primarily due between India and Pakistan following
to mergers, ownership changes, or Operation Sindoor. Reinsurers are mium Revision
company closures. Evaa Saiwal, Head likely to adjust pricing and coverage General insurers have expressed con-
of Liability Insurance at Policybazaar, terms in light of geopolitical uncer- cern over the delay in the
tainty.
remarked, "What once started as a government's announcement of re-
compliance-driven necessity has now Nymphea Batra, CEO of Guy Carpen- vised motor third-party (TP) premium
evolved into a cornerstone of proactive ter India, noted that while there's no rates for FY2025-26. The rates, typi-
risk management. The increasing rec- immediate systemic risk, prolonged cally notified in March following con-
ognition of D&O insurance as a vital conflict could trigger pricing hardening, sultations between IRDAI and the Min-
safeguard for leadership reflects a stra- stricter exclusions, and cautious de-risk- istry of Road Transport, remain pend-
ing, forcing insurers to continue charg-
Govt Notifies Cashless Treatment Scheme for Road ing the old rates. This delay could
cause pricing discrepancies, with insur-
Crash Victims ers bearing losses if rates increase ret-
The government has officially launched a long-awaited scheme offering free, roactively and policyholders overpaying
cashless treatment to all road crash victims nationwide, just days before if premiums are reduced.
the Supreme Court's deadline. The scheme mandates treatment at around A senior IRDAI official stated that the
30,000 'designated hospitals' onboarded by state and UT governments final notification is awaiting clearance
through the National Health Authority. Victims will be entitled to up to Rs. from the Ministry. An insurer's CEO
1.5 lakh in cashless medical care for seven days following a crash.
noted a potential 10-15% rate hike is
This initiative, part of the amended Motor Vehicles Act, 2019, had faced expected due to rising claim costs and
delays, prompting the Supreme Court to push for its immediate implemen- awards, which are already impacting
tation. The government has allocated Rs. 272 crore for its nationwide rollout solvency ratios. Historically, TP premi-
in FY26. ums have seen 2-4% annual hikes.

Treatment at non-designated hospitals will only be permitted for stabilisation Insurers are urging clarity-even if rates
purposes. Designated hospitals lacking trauma care must promptly refer vic- remain unchanged-as it helps manage
tims to better-equipped facilities and arrange transport. A 17-member steer- financial forecasting. Industry leaders
ing committee led by the transport secretary will oversee the scheme's warn that further delays will exacer-
execution. Reports suggest timely treatment could prevent over 50% of road bate underwriting losses in the already-
fatalities. stressed motor insurance segment.

8 June 2025 The Insurance Times