After having underwritten losses for many years, the national reinsurer General Insurance Corporation of India (GIC) has increased premiums payable in eight industrial categories on manufacturing rubber goods, plastics, textiles, chemicals...
The rates are increasing by three to nine times above the current rates. The new pricing has to be based on the actual loss experience of risks which sometimes may exceed 200%. The premium rates imposed on the insurers is based on the burning cost and the insurer’s management fees.
In fact, these increases only account for eight per cent of the company’s portfolio and are part of the property insurance segment. The direct insurers will then be able to place risks within other reinsurers if they do not intend to follow GIC’s recommendations.
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