14 April 2001

Re-insurance; rough weather ahead
Mumbai: The country's re-insurance programme is running into stormy weather.

The Oil and Natural Gas Commission (ONGC) with one of the largest sum-assured assets of the country, is without an insurance policy today as its previous policy expired on March 31.

It is still struggling to place the deal in London market, as the new premium rate quoted by the re-insurers is substantially higher than what the company paid for last year.

"The company has not been able to place the deal as it needs the board approval for accepting the new rate. The ONGC board is yet to meet to take a decision on this," said industry sources adding that almost Rs 200 crore of recent claims made by ONGC, coupled with the collapse of the largest oil rig Petrobras, have jacked up the premium for the domestic oil giant.

Explaining some of the reasons for such an 'unpredictable situation', industry sources said that a series of losses in Indian market both in marine, non-marine and energy sectors had added to the inability of the domestic non-life insurance players to re-adjust to the changing Indian market scenario.
The country's reinsurance programme has been redefined on the basis of the Insurance Regulatory & Development Authority (IRDA) regulation with General Insurance Corporation (GIC) playing the central role as a national re-insurer.