Page 6 - Insurance Times March 2016 Sample
P. 6
General Insurance premi- 1st preference for the Indian reinsurers; 2nd will be
ums rising with the rise foreigners
in catastrophes The insurance regulator had held a tween reinsurers and insurers will be
board meeting where right of the In- given to Indian reinsurers.
Premiums for general insurance dian reinsurers regarding refusal in
products under the natural catastro- treaties with insurers Swiss Re, Munich Re, Hannover Re,
was discussed and a final SCOR and RGA (Reinsur-
phe segment decision will be taken ance Group of America)
could see a soon. Foreign reinsurers had applied for branch li-
rise in premi- have written to the gov- censes after the final
ums, in the ernment and the insur- guidelines were issued.
wake of a ance regulator and met These reinsurers have
rise in the finance ministry officials on this issue. held several rounds of
number of incidents in this segment
such as floods and earthquakes in the IRDAI has added a new proposal in discussions among themselves on how
past two years. Senior executives in guidelines on branch licenses for for- to take up the matter with the regu-
the sector had met recently to dis- eign reinsurers where it said first pref- lator.
cuss this and decided that with the erence would be given to Indian
rise in claims, the premiums could reinsurers in their treaty surpluses. Industry executives said even though it
see an upward revision of 10-20 per was a draft, since the regulator had
cent from FY17. If this proposal goes through, first pref- said these changes were made on the
erence in all such agreements be- advice of the government; the pro-
Insurance companies took a recent posal was unlikely to be revised.
hit of Rs 4,800 crore due to claims
arising from the floods that hit P&I Club to provide cover to shipping companies
Chennai and other parts of Tamil
Nadu. Public sector insurers had the Public sector general insurers, includ- risk pool according to the Pooling
biggest impact. "With a rise in claims, ing official reinsurer GIC Re and ship- Agreement rules. The insurance cover
it is imperative that premiums also ping companies, are planning to set up is offered from the common pool.
see a proportionate rise," said a se- an exclusive entity known
nior general insurance executive. as P&I Club to provide Alice Vaidyan, CMD of GIC
cover to shipping compa- Re, revealed that efforts
In India and globally, insured losses nies. are on for the first time to
in natural catastrophes are much form such an entity in In-
lower than economic losses. Insur- P&I globally is a third- dia. "We need a lot of dif-
ance penetration is not so high with party-liability insurance ferent approvals from dif-
the top 10 cities having $179.8 bil- for ship owners, operators and compa- ferent authorities including DG Ship-
lion (Rs 11.9 lakh crore) of gross do- nies that charter ships. The insurance ping for setting up such an entity," she
mestic product (GDP) at risk, accord- covers their legal liability in the event said while participating in an event
ing to the Lloyd's City Risk Index of a crew member getting injured or organised by the Asia Insurance Post.
2015-2025. dying in an accident. It also covers col-
lision, wreck removal, marine pollu- "We also wish to open an office in Bra-
Global economic losses from natural tion, stowaways, cargo damage and zil and also want to set up an office in
catastrophes in 2015 were $123 bil- fines levied by foreign governments or China to cater to the Far East. In the
lion, about 30 per cent below the port authorities. In such a club, mem- future, we also wish to have an office
15-year average of $175 billion, said bers contribute to the club's common in the United States,'' Vaidyan said.
Impact Forecasting, Aon Benfield's
catastrophe model development Insurance policy can’t be pressurized on the bank customers
team. There were 14 multi-billion
dollar economic loss events around The Insurance Regulatory and Development Authority of In-
the world, the costliest being forest dia in its regulations on corporate agent registration has said
fires that went out of control in In- that no customer can be asked by corporate agents to buy
donesia. insurance policy compulsorily, that every bank employee will
be liable for the policy sold by her and data on this will have
to be made available when asked for.
6 The Insurance Times, March 2016