Page 8 - Insurance Times JUNE 2022
P. 8

AI takes Rs. 60000 crore          The report assumes greater signifi-  "Transparency is equally important.
                                            cance when occupational hazards to  Discontinuing uploading NL40 appears
          cover for fleet at Rs. 266
                                            life and property of fishers and fish  to be a retrograde step in this era of
          crore premium                     farmers  are increasingly on  the rise  transparency. Whether the FRBs in In-
                                            with the occurrence of frequent ex-  dia have provided any significant ad-
          Air India, has taken a Rs. 60,800 crore
                                            treme weather events in recent times.  vantage to the market as compared to
          ($8 billion) cover for Air India by pay-
                                                                               the services rendered by international
          ing Rs. 266 crore premium to  insur-
          ance companies, including Tata AIG Disclosure norms eased for        reinsurers who do not have a branch
                                                                               India is a matter that requires frank
          General Insurance.
                                            foreign          reinsurance
                                                                               study and analysis," said former IRDAI
          The airline managed to get a better
                                            branches, Lloyd's                  Whole-time Member KK Srinivasan.
          deal as it valued its fleet lower by al-
                                            In a surprise move, IRDAI has relaxed
          most $2 billion. According to the new
                                            the disclosure requirements of foreign EV  fire incidents  'not  a
          policy, the airline will not be able to fly
                                            reinsurance  branches  (FRBs)  and
          over Russian and Ukraine air space due                               concern', insurers unlikely
                                            Lloyd's India as part of "rationalisation
          to the ongoing war.                                                  to hike premiums
                                            of compliance" standards.
          The new cover, effective April 1 for a                               Despite rising incidents of two-wheeler
                                            The regulator said  FRBs and Lloyd's
          year, will be marginally higher than the                             electric vehicles (EVs)catching fire,
                                            India are now exempted from disclos-
          Rs. 258 crore paid in the last financial                             General Insurance companies are not
                                            ing financial details and underwriting
          year by the airline under its previous                               planning to increase premiums imme-
                                            performance through NL40 format.
          owner, the Indian government, said a                                 diately as claims are still in single dig-
                                            However, according to experts, the
          source close to the development. In                                  its. The insurers said they will keep a
                                            latest measures will lead to opaque-
          the last financial year, the airline had                             watch and hoped manufacturers will
                                            ness in the functioning of reinsurance
          taken a cover of Rs. 76,000 crore ($10                               improve the quality of vehicles.
                                            branches in India.
          billion). The policy also includes passen-
                                                                               The vehicle owner will be eligible for
                                            IRDAI said FRBs and Lloyd's India need
          ger liability in case of any mishaps.                                claims from an insurance company in
                                            not publish the half yearly and annual
          Air India has a fleet of 117 aircraft,                               the event of a two-wheeler EV catch-
                                            revenue  account,  profit & loss  ac-
          while Air India Express has a fleet of 24                            ing fire, only if he/she has a compre-
                                            count,  balance sheet and analytical
          narrow body aircraft.                                                hensive motor insurance policy, which
                                            ratios as mandated in the captioned
                                                                               includes an own damage and a third
                                            circular in the newspapers. "However,
                                                                               party cover. If one has only a third
          Insurance  coverage  for          they may continue to publish a true and
                                                                               party insurance cover, then insurance
                                            accurate abstract of the various re-
          fisheries, aquaculture units                                         companies will not cover the damage
                                            turns for the purpose of publicity on a
                                                                               to the vehicle because third party in-
          abysmal in India                  voluntary basis pursuant to provisions
                                                                               surance covers losses to the third party,
          Given the low penetration of insurance  of Section 25 of the Insurance Act,
                                                                               not to the vehicle owner.
          products in the fisheries sector, the FAO  1938," it said.
                                                                               "When we look at the overall portfo-
          World Review of Capture Fisheries and  FRBs and Lloyd's India provide reinsur-
                                                                               lio, if you have under written some of
          Aquaculture 2022  has  suggested in-  ance support to the direct insurers and
                                                                               the  better  EV  manufacturers,  you
          volvement of public and private insur-  the insurers do conduct their due dili-
                                                                               won't see too many claims. In our en-
          ance service providers to undertake  gence on the FRBs while entering re-
                                                                               tire portfolio - we have almost 25 per-
          proactive measures to turn the tide on  insurance contracts with them, IRDAI
                                                                               cent of the two-wheeler EV market
          fisheries and aquaculture insurance in  said. "The necessary information on
                                                                               share  -  we  have  seen  single-digit
          India.                            financials  is  also  made  available
                                                                               claims. So as of now, we do not see a
          With weather playing truant in the fish-  through public disclosures on the re-  need to increase the pricing because
          eries sector, the involvement of insur-  spective website of the FRBs. Reinsur-  this is within our appetite for losses.
          ance service providers should be en-  ance business is B2B segment and the  But  if  the numbers  become  much
          couraged for the overall competitive-  policyholders do not deal with the  larger, we have to look  at  it," said
          ness and efficiency of service delivery  reinsurers," it said in a circular to the  Bhargav Dasgupta, MD & CEO,  ICICI
          in the sector.                    CEOs of insurance companies.       Lombard General Insurance.
           8  The Insurance Times, June 2022
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