With a total premium of Rs 1655 crore, the claims ratio for IMTRIP was just 0.21 per cent in FY 24. Similarly, with a premium of Rs 1809 crore, the IMTRIP had a claim ratio of just 0.13 per cent in FY 23. Therefore, GIC Re and other members of the Pool had taken decision to reduce the premium which has also been approved by the IRDAI.
Mumbai: The re/insurance rates for the India Inc for Property and Fire cover may be rising from Apr 1, but with drastic fall in terror related claims in the country, state owned GIC Re and other members of the Indian Market Terrorism Pool(IMTRIP) have decided to revise the premium for the terror cover downward by 10 per cent at the beginning of the new fiscal.
The premium rates have been cut across the segments including residential, non-residential and industrial, said GIC Re circular issued on Mar 21.
The Pool is applicable to insurance of terrorism risk covered under Property insurance policies. Currently, the capacity offered by the Pool is at Rs 2,000 crore per location and will continue at that level in future though premium paid by companies for availing the cover will fall.
Premium rates have remained unchanged for many years though the claims paid by the Pool have declined significantly.
With a total premium of Rs1655 crore, the claims ratio for IMTRIP was just 0.21 per cent in FY 24. Similarly, with a premium of Rs 1809 crore, the IMTRIP had a claim ratio of just 0.13 per cent in FY 23.
Therefore, GIC Re and other members of the Pool had taken decision to reduce the premium which has also been approved by the IRDAI.
However, no cancellation of the policy/policies issued prior to the effective date (1st April 2025) can be resorted to for taking benefit of the rate reduction, said GIC Re.
The IMTRIP was established in the aftermath of the 9/11 incident in the United States which led to worldwide withdrawal of treaty capacity for Terrorism Insurance. The Pool was formed in April 2002 to create domestic capacity within India to underwrite terrorism risk. The Pool has now completed 22 years of successful operations.
Twenty-four non-life insurance companies (other than monoline insurers) and GIC Re are members of the Pool.
Over the course of last two years, the International Terrorism/Political Violence/War Market has hardened significantly, mainly due to ongoing Russia-Ukraine crisis, Israel -Hamas War, Red Sea Houthi Movements, Black Lives Matter Protest across USA, Canada, and Europe and Civil Unrest in South Africa. Therefore, the standalone facultative insurance facility backed by international (re)insurers which was previously readily available for Indian market as an alternative to coverage offered by the Pool which was considered costlier,has shrunk significantly.
The global scenario has also impacted the Pool’s Excess of Loss Reinsurance Program which is purchased by the GIC Re on behalf of all the member companies. However, there has been no change/restriction in coverage offered by Pool to domestic market due to the robust corpus accumulated over the years.
GIC Re as Pool Manager gets 1 per cent (of original gross premium) management commission. Apart from its role as Pool Manager, GIC Re also contributes capacity to the Pool as a member of the Pool to the tune of 16.68 per cent and participates as a reinsurer on the Pool’s excess of loss reinsurance protection.