Insurance cover against terror attacks likely to become cheaper soon
17 Feb, 2014 01:01 PM
Insurance cover against terror attacks is set to get cheaper from April 1 following a decline in the number of incidents, a development that could allow companies to get more customers. Rates are likely to fall 15-20 per cent, industry executives said.

"The experience of Indian terrorism risk insurance pool has been good, with no major claim after the 2008 attack, so we are bringing down the rates," said General Insurance Corporation (GIC) chairman AK Roy. "The work is in progress and the new rates will be applicable from April 1."

In India, the premium for insurance against terrorism is 25-30 per cent higher than in most other countries. The limit for a single claim is set to be raised to Rs 1,500 crore from the existingRs 1,000 crore. During the 26/11 attack, the limit was Rs 750 crore per incident.

The pool had settled claims of over Rs 500 crore during the November 2008 attacks in Mumbai. The number of companies purchasing terrorism cover from international market is high as the rates are cheaper.

Roy said that because of the rate differential business was flowing outside the country. "There have been instances where claims have been rejected for Indian companies," said another insurance company executive.

Claims against terror attacks in India are settled through a pool of funds, operated by the state-run GIC, built on contributions from all general insurers that sell such protection. The pool, set up in 2002, has a corpus of about Rs 3,500 crore.
Source : The Economic Times

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