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 ₹5,000-crore hit from the Chennai floods and GIC Re's share was around ₹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 ₹16,000 crore annual premium in the current fiscal out of which ₹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.

In the Budget, the government has made an allocation of ₹5,500 crore for the crop insurance programme under which farmers will have to pay 1.5 per cent of the premium for the sum insured for rabi crop and 2 per cent of the premium for kharif crop.

Source - thehindubusinessline.com