GLOBAL REINSURERS have inti mated Indian general insurers about the hardening of pricing and tighter tenns and conditions inthecomingdaysforIndian busi ness in the wake of Russian inva sion of Ukraine and subsequent imposition of severesanctionsby Western countries on Russia.
Domestic general insurers, whowerewaitingforApril 1rein surance renewal, might have to rush for early renewals of their annual business to avert a price hike, insurancesourcessaid."Yes, we have received alertsfromour global reinsurersabout a possible hardening of premi ums and tightening terms and conditions in coming days.The higher pric ing will be impacting marine cargo,particularly movements in Black Sea initially but ifwar con tinues, it can include property prices,going ahead," said anoffi cial of New India Insurance, the count1y's largest general insur ancecompany with operationsin 28 countries.
"Wehave advised ourclients for early renewals to avoid any kind of complications," he said. Indian insurers normally rein sure their business with global reinsurers as a risk mitigation measure.
In fact,one of the India's large insurance accounts, Air India, with a sum assured of $10billion is due for renewal by April 1.The NIA isthe primary insurerforAir India,whichwasacquired byTata from the government recently. 'Though there is no impact on Indian clients immediately, they need tomovefastassituationcan further escalate in the interna tional markets." said the CEO of one of the global reinsurers hav ing itsoperations in India
Industry officials said the sanctions will also hit the placement of business oflndian joint ventures with Russian partnership.
State-owned reinsurer GIC
Re hassaidthere was no causeof concern immediately from the reinsura nce market poi nt of view.GIC Re has a Russian sub sidiary operating out of Moscow. 'The Russian government hasal ready asked its national rein surer to provide reinsurance supp01t to the local business in view of the international sanc tions,"said an official.
While GIC Rewrites the busi ness of Aeroflot, the flag carrier and the largest airline of the Russian Federation, from its Mumbai headquarters, most of the Russian businessesare writ ten by its subsidiary in Moscow. Public sector ECGC Ltd,which provides credit risk insuranceand related services for exports, has canied outa review of the coun try-risk rating ofRussia as per its extant underwriting policy. Accordingly, with effect from February 25, the cover categmy ofRussia hasbeen modified from Open Cover to Restricted Cover
Category forwhich revolving lim its (nom1ally valid for a year) are approved specifically on a case to-case basis.
l11e international tradecredit insurer has already put Ukraine under its restricted category.
been madetoensurethat it isable to assess and monitor the risks coveredunder itsexport creditin surance policies and to place ap propriate risk mitigation meas ures. "The above measure will alsoenable the exporters / banks in India in assessing the expmt payment realization prospects from buyers and/or banks in Russia," officials said.
Customers havebeen suitably advised tocontact their se1vicing branch of ECGCforcoveron ship ments to Russia,they said. ECGC continues to monitor the situa tion and fmther review oftheun derwriting policy will be under taken based on future developments. "We have neither got any claims as yet from any clients who have taken coversfor their Russianor Ukraine business norhaveraised ourpremiumsfor providing covers to these coun tries,"officials said.