Reinsurance premium to rise

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In a chain of events due to slowdown, Indian Insurance industry now have one more reason to worry as insurance rates for reinsuring the insurance business is going to increase,

We know that if any thing happens to us our insurance company will pay to our family but what if claims come to an insurance company in very large scale? To deal with such

situations most of the insurers transfer portion of their risk to reinsurance companies.

Because of Financial crisis which we are witnessing,

Munich Re who is the worlds largest reinsures are planning to increase the premium rates for the Indian insurance companies from 1st April 2009 onwards.

This would be a bad news for the Indian insurance companies who are already facing tough time due to competition and slowdown.

Normally Indian Insurance Company’s major portion of risk is insured with GIC, who is also one of the reinsures; However portion of risk insured by Munich Re. would be impacted.

Now if this will be materialized Indian companies will have few options like either to accept high premium or reduce the risk cover, change the insurer.

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