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Manish Basu

Kolkata, Dec. 1 The National Insurance Corporation (NIC) is expecting a growth in terrorism cover premium income from corporate clients in days to come, according to Mr V. Ramasaamy, NIC’s Chairman cum Managing Director.

Premium income from terrorism cover by NIC has grown by nearly 15 per cent in the first six months of 2008-09 compared with the same period last year. Its premium income from corporate terror cover in 2007-08 was nearly Rs 20 crore, an NIC official told Business Line, adding that currently 90 per cent of the companies taking fire insurance also avail terror cover.

“Learning from the recent incidents of terror, we would ask our corporate clients to take more terrorism covers bundled with other policies,” Mr Ramasaamy said. The public sector general insurer does not have any exposure in the two hotels — Taj and Oberoi — damaged in the recent terror attack in Mumbai, he said.

The annual premium income collected by all public and private insurers in General Insurance Corporation’s terror pool during 2007-08 was over Rs 150 crore, while the accumulated premium income in the pool till date is nearly Rs 1,000 crore.

The rate of premium for terror cover may be raised for a limited period starting from April in order refill the pool as claims from the two damaged hotels is expected to eat up nearly 70 per cent of the fund, an official at a public sector general insurance company said.

The premium for terrorism cover for industrial property presently costs 22 paise for a sum of Rs 1,000 assured (up to a total sum assured of Rs 500 crore and lower thereafter). The premium for hotels and other non-industrial properties for the same sum assured limit is 13 paise.

More Stories on : General Insurance | Terrorism

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