General insurance premiums are likely to rise next fiscal as reinsurance rates have shot up by 10 per cent in the domestic market due to rising losses from catastrophes said a top official from the country's sole reinsurer General Insurance Corporation (GIC Re).

Alice Vaidyan, Chairman and Managing Director of GIC Re while speaking at the sidelines on a seminar on agricultural insurance said that despite reinsurance rates softening globally, the high incidence of catastrophes in the last five years will push up reinsurance rates by 10 per cent during renewals in April.

She said that rates are likely to go up in segments where insurers have seen huge losses such as property and motor insurance.

The insurance industry took a hit of Rs 5,000 crore in the recent Chennai floods and GIC Re's share was around Rs 1,000 crore.

Vaidyan also said that the company is expected to take a hit of $20 million from the Dubai floods.

The company is expected to cross Rs 16,000 crore of annual premium in the current fiscal out of which Rs 1,000 crore will come from agricultural insurance. On the new crop insurance programme announced by the government, Vaidyan said that insurers need to stick to actuarial pricing while quoting rates during bidding as reinsurer have seen substantial losses in the segment.

In the Union Budget, the government has made an allocation of Rs 5,500 crore for the crop insurance programme under which farmers will have to pay 1.5 per cent of the premium for the sum insured for rabi crop and 2 per cent of the premium for kharif crop.

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