Terror insurance premium to dip

Insurance against terror will command a lower premium starting from the next financial year as the pool created in this respect has accumulated a large sum and received less claims.

General insurers have agreed to cut down the premium charges for the Market Terrorism Risk Insurance Pool to up to 0.003 per cent of the sum insured for various categories of properties, an official of a non-life insurer said.

The rate would come down by 0.022 per cent against the current 0.025 per cent for the total sum insured per location for the industrial risk on the property worth up to Rs 500 crore.

Property worth over Rs 500 crore and less than Rs 2,000 crore would attract 0.017 per cent premium against the present 0.02 per cent under the industrial risk category.

A property worth over Rs 2,000 crore would attract 0.013 per cent of the sum insured against the existing rate of 0.015 per cent under industrial category, while the rate for non-industrial risk has been reduced to 0.008 per cent.

"Reduction in prices and increase in pool capacity are a reflection of success of the pool initiated after 9/11, which has shielded the Indian market from international price fluctuation," said Prudent Insurance Brokers CEO Pavan Dhingra.

The decision was taken considering the claims experienced against the Terrorism Pool, he said.

All renewal or new business may use revised rates on provisional basis, subject to final advice by Irda.