14 sept 2001
companies to get ripped
new delhiwith the us blasts causing the worst ever
damages in insurance history, large projects in india depending
heavily on international reinsurance companies for coverage, will
have to cough up a higher premium.
the reinsurance market has been already hardening and losses
following the attacks would accelerate the trend, said industry
sources. reinsurance rates are determined by the capacity of the
reinsurance market to underwrite risks.
swiss re, the worlds second largest reinsurance group, tried to
put up a brave face, saying that it has adequate reserves to cover
any claims related to tuesdays terrorist attacks.
however industry sources said that the companys balance sheet
would definitely be hit considering that investment income would
also fall on account of the downturn in the markets this year.
rating agency moodys said that insurance claims arising out of
the us attacks could range from $10-15 bn on account of property
and liability covers only. among man-made losses, the losses will
definitely be the worst so far much higher than the $ 2.9bn
claims arising out of explosion on offshore platform piper alpha
the us insurers will face claims for the complete destruction of
the two world trade center towers, which cost $750 million to
build in the early 1970s. insurers will also pick up damages to
surrounding buildings and cars, plus the costs of firms relocating
and making up their lost income.
us insurer chubb, which specialises in offering corporate property
insurance, said it has "significant property exposure"
at the world trade center in new york, but reinsurance should
limit its pre-tax losses to $100 million to $200 million.
shares of insurance companies across the world, in japan, uk, and
other european countries fell sharply as investors expected their
finances to be hit as a result of the us attack claims.
continues to fall against dollar
mumbaicontinuing its free fall against the dollar the
rupee broke the 47.50 per dollar barrier to settle at a
historic-low of rs 47.56/57 a dollar. this was following a dollar
buying spree on the inter-bank foreign exchange market on
the rupee had breached the 47.50 level on wednesday but later
recovered sharply after the government made a statement that the
worst terrorist attack in the us would not have any immediate
impact on the indian currency.
after ruling at the level of 47.14 per dollar for quiet a long
time on sustained dollar selling, the rupee has been hitting new
lows since september 6.
the rupee opened marginally weak at rs 47.4350/4450 per dollar but
came under pressure immediately thereafter and went into a
tailspin ending at rs 47.56/57 as against its wednesday's close of
the rupee faced tremendous pressure when foreign banks as well as
public sector banks started heavy dollar purchases to meet
ever-increasing demand from corporates and importers panicking
after the rupee crossed 47.50 a dollar mark during the trading.
10 sept 2001
foreign reserves cross $45 bn
india's foreign currency reserves crossed the $45 billion mark
during the week ending august 31, 2001. the foreign currency
assets increased to $42,537 million, up by $360 million, according
to the reserve bank of india (rbi).
the country's gold reserves also grew by $46 million to $2,817
million while the special drawing rights remained unchanged at $4
million. the foreign currency assets expressed in us dollar terms
include the effect of appreciation/depreciation of non-us
currencies such as euro, sterling and yen.
the loans and advances by rbi to central government rose by rs
9,453 crore from a nil balance in previous week while that to the
state governments increased by rs 378 crore to rs 4,190 crore, rbi
bank threatens to encash rs 1400-crore guarantee
the us exim bank has threatened to encash the rs 1,401.5 crore
guarantee given to it by idbi-led consortium of indian financial
institutions (fis) for seeking finance for enron's dabhol power
in its submission to the
mumbai high court, the us exim bank said it would be compelled to
draw upon the guarantees given to it by the indian financial
institutions if the dpc was unable to repay the loan advanced by
the bank said it was a
beneficiary of a guarantee from a syndicate of indian fis--idbi,
ifci ltd, icici ltd, state bank of india and canara bank.
the bank said of the
$298.2 million advanced to dpc, approximately $ 221.7 million of
principal remains outstanding and was owed by the us energy major
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