Kathmandu. Indian reinsurer GIC Reliance is set to reduce premium rates for terrorism insurance by 10 percent with effect from April 1. The reinsurer and other members participating in the pool have decided to reduce premium rates with effect from the new financial year.
According to Asian Insurance Post, the reinsurer is likely to increase reinsurance rates for Indian companies for property and fire insurance from April 1. In a GIC Reco circular issued on March 21, premium rates have been reduced for terrorism insurance across all segments, including residential, non-residential and industrial.
The pool applies to insurance of terrorism risks secured under property insurance policies. Currently, the capacity offered by the pool is Rs 2000 crore per seat, which will continue to be the case in the future, although the premium rates paid by companies to secure the security will decrease.
Although the claims paid by the pool have decreased significantly, the premium rates have remained unchanged for many years. The decision to reduce premiums by Jiaxi Re and other members of the pool has also been approved by the Indian insurance regulator.
The claims ratio for the pool, which collected a total premium of Rs 16.55 billion during the year, was only 0.21 percent in FY24. Similarly, with a premium of Rs 18.09 billion, the pool had a claim ratio of only 0.13 percent in FY23.
