General insurance premiums are likely to rise next fiscal as reinsurance rates have increased by 10 per cent in the domestic market due to rising losses from catastrophes, said a top official from the country's sole reinsurer General Insurance Corporation (GIC Re).
Speaking on the sidelines of a seminar on agricultural insurance, Alice Vaidyan, Chairman and Managing Director of GIC Re, said that despite reinsurance rates softening globally, the high incidence of catastrophes in the last five years will push up reinsurance rates by 10 per cent during renewals in April.
She said rates are likely to go up in segments where insurers have seen huge losses such as property and motor insurance.
The insurance industry took a Rs. 5,000-crore hit from the Chennai floods and GIC Re's share was around Rs. 1,000 crore.
Vaidyan said the reinsurer is expected to take a hit of $20 million from the Dubai floods. The company is expected to cross Rs. 16,000 crore annual premium in the current fiscal out of which Rs. 1,000 crore will come from agricultural insurance. On the new crop insurance programme announced by the government, Vaidyan said that insurers need to stick to actuarial pricing while quoting rates during bidding as reinsurers have seen substantial losses in the segment.
