Hyderabad: Insurance companies are seeing an increase in the number of subscribers who want to insure against the risk of terrorism, according to the Insurance Regulatory Development Authority.
Infra projects like airports, seaports, Metro Rail projects, including those in AP and TS are going in for terrorism risk insurance.
The annual report of the city-based IRDA, released on Thursday, revealed that the Terrorism Risk Insurance Pool’s premium income for the year is Rs 475.93 crore, a slight increase over the last financial year.
The report said, “Oil and gas companies like ONGC, huge infra projects such as Metro projects, ports, airports are seeking terrorism insurance cover.”
The pool covers terrorism risk under property insurance policies. The Indian Market Terrorism Risk Insurance Pool was formed by all non-life insurance companies in April 2002, after terrorism cover was withdrawn by re-insurers post 9/11.
The IRDA said in its report that the limit of indemnity per location had been enhanced to '1,500 crore from 2014 as against the previous level of Rs 1,000 crore.
Terror premium income declines
The IRDA in its report said, “The premium rates have been revised downward under the Terrorism Pool arrangement. In order to improve the market penetration for Terrorism Risk Insurance with better marketing by Brokers, Agents, the Brokerage and Agency commission of up to 5 per cent on Terrorism premium was allowed for Terrorism Insurance business procured through the agents.”
The Pool’s premium income for 2015-16 was Rs 475.93 crore compared to Rs 472.33 crore in 2014-15 in the country. The claims paid by the Pool during 2015-16 were only Rs 2.04 crore as no major losses were reported to the Pool during the financial year.
Terrorism cover is an add-on cover provided under Property Insurance Policies by endorsement or it may be optional.
