Page 7 - Insurance Times May 2019

GIC Re raises premiums in 8 sectors Theft by employee of Lo-
GIC Re has increased premiums payable in eight sectors where claims have been gistic company not cov-
high. The premium on manufacturing rub-
ber goods, plastics, textiles, chemicals (be- ered under Jeweller's
low 32 degrees flashpoint), besides trans- block insurance policy
porter godowns, steel factories and ther- Logistics company employees de-
mal power plants have been increased camping with
based on an analysis of the burning-cost jew eller y
ratio by the Insurance Information Bureau
while in transit
(IIB). The rates are going up by three to
or goods dis-
nine times in some segments.
appe aring
GIC Re, has also asked general insurance companies to add the cost of man- while left unattended by a logistics
agement to the IIB-identified rates and accordingly provide quotations to their provider are not covered under the
corporate clients if they want treaty arrangements with it. While insurance costs Jeweller's blockinsurance policy,
will increase for companies, the higher premium will correct a distortion in which covers transit related risk like
individual policy rates. theft, robbery, burglary, etc.
The regulator has been asking insurers to follow the burning cost ratio analysis Recently an employee of an logistics
method while working out the commercial premium rates. Burning-cost ratio company ran away with 11 kg of
in insurance is the estimated cost of future claims based on past experience. gold jewellery worth Rs 3.5 crore.
"The owner of the jewellery firm was
"IIB has worked out burn cost and GIC Re has picked up eight occupancies where
claim ratio is above 200 per cent," said Alice Vaidyan, chairman of GIC Re. not entertained either by the insur-
ance company nor the logistics pro-
"We have to think about retail policyholders, who are subsidising corporate. vider," said Surendra Mehta, Na-
Companies have enjoyed discounts of over 99 per cent for 11 years. The Indian tional Secretary, India Bullion & Jew-
general insurance market has a"combined ratio of over 100 per cent and there ellers Association (IBJA).
is a need for correction. When reinsurance companies are making losses, they
While the police recovered 10 of the
will pass it on."
11 kg, the news of Jewellers' block
"Non-industrial risks will not be impacted. However, for smaller companies, the insurance policy not covering "infi-
rates were really low and they may see rates doubling," said Sanjay Datta, head delity" - dishonesty by logistics com-
of underwriting at ICICI Lombard General Insurance. He said units that had no pany employees and /or gross neg-
claims will be affected too because the entire sector is being re-rated. ligence of logistics companies - loss
due to unattended vehicles, myste-
Sponsor protection cover rious disappearance of goods - has
shocked the trade.
Sponsor protection is a cover offered in almost all student travel policies by
insurance companies. It is available for students going outside India for stud- The solution lies in the logistics com-
ies. Sponsor here would mean an individual, usually parents of the student, re- pany taking a fidelity policy for their
sponsible for paying tuition fees of the insured persons (student) for his or her employees or a jeweller taking a
fulltime studies in an educational institution outside India. third-party fidelity policy which will
cover logistics company, goldsmiths
One can claim on the sponsor protection cover when the sponsor meets with and other third parties, their em-
an accident which results in his or her death or permanent disability due to ployees and contractual employees.
which he or she is unable to pay the tuition fees of the insured. In such a situ- However, he added, for negligence
ation, the insurance company would reimburse that proportion of the tuition of Logistics Company - disappear-
fees (to the extent of usm insured) for the remaining period of the student's ance from unattended vehicle - the
education. This feature is there in policies of Bajaj Allance General, Tata AIG logistics company has to compulso-
and Apollo Munich Health Insurance, among others. rily have a carrier's legal liability in-
Note that, a student cannot claim both under sponsor protection and study surance policy, there being "no fea-
interruption (where a student is unable to continue his/her studies) for the same sible insurance cover a jeweller can
take in such a case."
reasons.
The Insurance Times, May 2019 7