Public sector insurance companies, including New India Assurance, have suggested retention of the five per cent compulsory reinsurance business with state-owned GIC Re.
“We have proposed to the IRDA that the compulsory reinsurance business with GIC Re can be continued for one more year,” said New India Assurance chairman G Srinivasan. As per the norms of the Insurance Regulatory and Development Authority (IRDA), domestic general insurers need to park five per cent of their reinsurance business with GIC Re. General insurers were clamouring for a complete phase-out of the decade-long practice of obligatory cession to GIC Re. This obligation can work both ways. When general insurers were bleeding with underwriting losses, the obligatory business had become a liability for GIC Re. The compulsory cession was 20 per cent earlier which was brought down to 15 per cent in 2007, 10 per cent in 2008 and 5 per cent two years ago.
- IRDAI panel for dilution of compulsory cession for certain biz
- New India share closes with loss of 9.37%
- IRDA gives initial approval to 4 global reinsurance majors
- IRDA’s new reinsurance guidelines favour public sector firm GIC Re
- Rs 100 cr capital requirement for new reinsurers
- GIC not keen to continue with 10% compulsory biz from local insurers
Under the Pradhan Mantri Suraksha Bima Yojana Scheme, the number of enrollments has crossed eight crore and the premium collection amounted to around Rs 96 crore. “New India has enrolled 1.3 crore and collected a premium of around Rs 15.6 core,” Srinivasan said. While New India has settled 13 claims out of 16 claims so far, the overall industry has received 60 claims.
On the Rs 1,500 crore Nuclear Insurance Pool, he said the insurance companies are still working out the modalities with Nuclear Power Corporation. “It’s one single policy. We’re yet to finalise the policy details,” he told The Indian Express.
Srinivasan said global reinsurance market has softened. “The premium has come down by 15-20 per cent in the last one year. Indian companies will benefit to that extent as reinsurance costs have come down,” he said.
He said the insurers planning to move the appellate authority against the order of the Competition Commission of India (CCI) imposing a penalty of Rs 671 crore on four public sector insurance companies for their role in the bidding process initiated by Kerala government for selecting insurance service provider for Rashtriya Swasthya Bima Yojna for 2010-11, 2011-12 and 2012-13. “Our lawyers are moving for the appeal. We have a strong case,” he said.
He said the company made a 42 per cent jump in net profit to Rs 441 crore and a 14.13 per cent increase in global premium to Rs 4,587 crore in the quarter ended June 2015. “Though there are some pockets of recovery in the corporate sector, we will continue to focus on the retail segment,” Srinivasan said.
“We have already settled more than 99 per cent of the Jammu & Kashmir flood claims and 97 per cent of the Hud-Hud cyclone claims,” he said.