Page 9 - Insurance Times December 2023

issued, underscoring the significance of
creative financial solutions in the dy- Insurers hike premiums for public infra assets post
namic field of road infrastructure de- Sikkim cloudburst
velopment. It will be a big step toward Following a barrage of claims brought on by October's glacial lake outburst
enabling "Ease of Doing Business" and and record flooding in Sikkim and sub-Himalayan West Bengal, Indian insur-
will promote private involvement in the ers are hiking premiums by up to 25% for industrial sites, railroads, roads,
highway industry. tunnels, bridges, and other public infrastructure assets.

NHAI has received 1,665 BGs totaling After unseasonal rains early in October caused the banks of the glacial South
Rs. 15,000 crore since 2022. The abun- Lhonak Lake to breach, a wall of water battered public infrastructure as-
dance of BGs is a significant opportu- sets and drowned homes across a large swathe of urban Sikkim and the
nity for insurance companies, and the hilly reaches of West Bengal. The state-owned hydroelectric unit Sikkim Urja
increased use of surety bonds will in- filed an insurance claim of 500 crore.
crease the amount of cash available for "The industry has decided to raise rates by as much as 25%, mostly to get
road projects.
reinsurance support, in the wake of the large claim from Sikkim Urja," an
industry source told ET. "If insurers do not raise rates, it will be difficult to
In September, the Employ- get reinsurance support."
ees' State Insurance Corp Speaking under anonymity, insurance executives stated that the new

added 18.88 lakh new charges are required to manage rising risks, particularly since reinsurers
won't cover such public assets without further funding.
members.
According to the most recent payroll FY37. In a meeting with members of implement the Motor Vehicles' Act.
data, the Employees' State Insurance the General Insurance Council, CEOs of
Corporation (ESIC) added 18.88 lakh private sector general insurance busi- In a news release, the Ministry of Fi-
new employees under the ESI Scheme nesses, and Vivek Joshi, Secretary of nance mentioned how the expansion
in September. According to a labor the Department of Financial Services, of cashless establishments and treat-
ministry statement, about 22,544 new Ministry of Finance, this forecast was ment cost standardization might pro-
establishments were registered and pel the growth of health insurance. In
presented to them.
placed within the ESIC's social security India, almost 40 crore individuals do
program in September, guaranteeing The non-life insurance industry re- not have health insurance, according
greater coverage. ported 16.41% year-over-year growth to a Niti Aayog Health Insurance Re-
in March 2023. Nonetheless, India's port. The health insurance market is
According to the preliminary payroll general insurance penetration rate is predicted to grow as a result of the
statistics provided by ESIC, there were still low at 1% as of FY21, compared to adoption of a hybrid model that com-
18.88 lakh new hires in September.
3.4% in Taiwan and 5.2% in South Ko- bines aspects of insurance and trust.
According to the data, out of the rea. CEOs in the sector blamed a lack
18.88 lakh new employees that were of knowledge for this and emphasized General insurers' premi-
added during the month, 9.06 lakh of how digital technology is opening up ums rise 14%
them are under the age of 25, making new distribution avenues.
up 47.98 percent of all new registra- The regular Goods and Service Tax The monthly premiums of non-life in-
tions. This indicates that more posi- (GST) notices that general insurance surance companies increased by
tions have been created for the businesses receive were another topic 13.65% in October of this year to Rs
younger generation. of discussion during the conference. 23,814.64 crore, up from Rs 20,954.89
The industry's growth depends on re- crore in the same time last year,
Non-life insurance might solving disputes more quickly and low- helped by robust growth across sec-
tors.
grow at a 14-15% CAGR ering the GST rates on health insur-
ance policies. Since that 54% of Indian Nonetheless, based on data released
until FY37. vehicles are uninsured, it was empha- by the General Insurance Council, pub-
Gross direct premium income (GDPI) sized how crucial it is for state govern- lic sector general insurance businesses
for the non-life insurance sector is ex- ments and the Ministry of Road Trans- recorded a 3.62% de-growth over the
pected to increase by 14% to 15% by port and Highways to work together to same period. New India Assurance

The Insurance Times December 2023 9