April renewals see premium hike in India

Hard Markets in India - Rising April renewal rates

2022-23 has seen a sharp rise in renewals of insurance premiums across categories

• 40% hike in group health policy
• 80-100% jump in cyber
• 20-30 % ?in certain segments – other than health and cyber — depending on the group and customers.
• Large premium hikes in aviation, marine

Market size

• Indian insurance industry is expected to reach Rs 2.25 trillion in 2021-22
• Indian reinsurance market has a size of over Rs 44,000 crore in 2020-21 – GIC commands over 60 % of the market share

Market comments

Reinsurers led by GIC Re and general insurers led by New India Assurance (NIA) have hiked their premiums

We are putting our pricing approach on a more sound technical basis and have tried pricing correction wherever we feel it is warranted,’’ said Devesh Srivastava, CMD, GIC Re.

The April market continued to signal a hardening stance in general across both property engineering as well as motor third party for the markets by reinsurers, said a senior official of a foreign reinsurance branch (FRB).

Health

Price increase of 40 % in group health portfolio is due to higher claims because of Covid-19 pandemic

Property

Property line of business has seen some amount of stability in terms of pricing, the advantages have been largely neutralised by a cut-throat competition among the re-insurers to grab the huge SME business.

Globally, there is a churn following record level catastrophe losses during the last three-four years and the situation was exacerbated by the pandemic. It is expected that the premium hardening witnessed during the last couple of years will sustain for at least for some time.

Aviation

The aviation class is presently facing uncertainty due to major claims on leased aircraft [Aviation?Re/insurers Face Claims as High as $10B From Planes Grounded in?Russia] and this will certainly impact the aviation class. However, market-wide impact is not expected to be significant.

Cyber

Cyber risks present accumulation potential which is more challenging than even a pandemic since it has evaded the geographical dimension of risk accumulation.

Number of cyber claims has increased multiple folds with 4.5 per cent of firms with 1st party cover now making a claim with an increase in the size of the claim.