Insurance premiums to turn 10% costlier

Global reinsurers raise rates, pushing up insurance cost in India

- Anirudh Laskar

The insurance cost for Indian companies and motor vehicle owners is set to surge as global reinsurers, impacted by the war in Ukraine and other weather-related losses worldwide, have raised rates by 40-60%.

The increase in reinsurance rates is expected to result in a minimum 10% rise in insurance premiums for properties, liabilities, marine, and motor covers in the coming months, top executives of Indian general insurers said.

“The cost of reinsurance is expected to increase the property premiums by 8-10% across a few categories of risks. Similarly, we may witness an increase in motor and marine covers as well,” said Ritesh Kumar, managing director and chief executive of HDFC ERGO General Insurance Co. Ltd.

India’s general insurance industry, comprising 24 companies and excluding standalone health and agriculture insurers, underwrote a gross premium of ₹2.15 trillion during FY23, a 16% increase from the previous year. These insurers collectively hold 84% market share in the general insurance industry.

Bhargav Dasgupta, managing director and CEO of ICICI Lombard General Insurance Co. Ltd, India’s largest private general insurer, said, “Extensive damages are happening, which in turn, increased the reinsurance costs for Indian insurers.”

For India, reinsurance rates have risen roughly 40% and 60%, Dasgupta said.