Rs 1.89 trillion Indian general insurance market though has seen moderate price rise in the Apr 1 renewals, the overall rates for the cedants for their portfolios have dropped as it had once again witnessed lower catastrophe activities and lower claims during the previous year
“We haven't seen any major price rise in the premium at renewals,'' said Atul Sahai, CMD, New India Assurance, the largest non-life insuranace company, in the country.
Sources with the foreign reinsurers, who are present in form of their branch operations, have explained though reinsurnace premiums for the Indian cedants have risen, the overall rates calculated on the basis of total sum assured have dropped significantly.
Also according to sources, the cedants have managed to negotiate higher commission from the reinsurers during the renewals.The average reinsurnace commissions have gone up from 15 per cent to 20 per cent during the Apr 1, 2021 renewals.
“The overall drop in the rates during the Apr 1 renewals have been used by the cedants to take larger cover for their portfolios. For reinsurers like us, it is a case of double whammy, as rates have dropped and commissions paid to the cedants have flared up,'' said sources.
According to Willis Re, reinsurance rate improvements on the non-proportional treaties in Indian market were moderate and buyers took the opportunity to increase limits, particularly for the top earth quake only layers.
Increases in deductibles were also seen.Rate improvements on the underlying primary business ensured continued interest in pro rata treaties, added the report..
“Owing to prior years’ performance and better risk selection, the private companies enjoyed higher commissions and achieved better terms over last year. Loss participation corridors were removed for many of the private insurers,'' said the report.
On Surplus Treaties, the report said ceding companies increased retentions, sought increases in capacity and managed to secure higher event limits. Pro rata commissions significantly differentiated public and private companies
Super cyclonic Storm Amphan had majorly hit the eastern part of India and Treaties of the public insurers suffered losses due to the storm.
However, the other two cyclones which hit either side of the Indian peninsula,Nisarga and Nivar, were relatively benign. Flooding events also occurred but didn’t cause much damage to property portfolios.
Despite GIC Re’s leading position,foreign reinsurers were able to garner more shares and some lead positions,observed th report. .