GIC to provide Rs 400 cr war risk cover for Indian shippers

Mumbai, Jan 1 | Updated: Jan 2 2006, 05:30am hrs
General Insurance Corporation (GIC), the countrys official reinsurer, has taken over the scheme administered by the Centre for the domestic shipping industry.

In a bid to protect the shipping industry during war, an additional war risk cover of Rs 400 crore has been taken by the GIC. Our extra capacity will make the domestic shipping industry, which has international exposure on a day-to- day basis, more comfortable, said a senior official of GIC, adding that the capacity was necessary to support the growing domestic shipping industry.

Indias 102 shipping companies together own a fleet of 669 vessels with a gross tonnage of 6.91 million as on March 2005. The Shipping Corporation of India, the countrys largest carrier, manages 82 ships and the share of Indian flagships in the countrys overseas sea-borne trade has been hovering around 30% during the last few years.

Earlier, the Centre, which was administering the scheme, had granted freedom to ship owners to place their war risk cover directly with the domestic general insurance.

Sailing To Safety

Earlier, though the insurance was provided by the govt, the scheme was administered only by the four public sector general insurers.
The premium collected on this account was credited to the government and it was charging a premium of 0.08% per annum on the market value of the ship

Indian ship owners had to insure their war risk compulsorily with the government, through the War-Risk Insurance on Marine Hulls (1976) scheme. Though this cover was provided by the government directly to the ship owners, the scheme was administered only by the four public sector general insurers.

The premium collected on this account was credited to the government and the claims, if any, was paid by the Centre. The government was charging a premium of 0.08% per annum on the market value of the ship by way of war-risk (peace-time war risk).