The reinsurers, whose rates have been falling for last three years are contemplating a rate hike, as insurance claims close to Rs 3,5000 crore have hit the Indian market overnight out of Mumbai, Gujarat flooding and ONGCs fire tragedy in its Mumbai high oil platform. The insurance claims are the largest in the countrys insurance history. Speaking to FE, Mr Joshi said We would not allow a situation where International reinsurers take advantage of such an unfortunate development in the country, he averred. GIC, the official reinsurer of the country will provide its support to the general insurance industry to meet the situation arising out of unprecedented Mumbai flooding and consequent huge claims, he assured.
According to him, GIC is prepared to flex its muscle to provide its extra capacity to the local insurers, who need not be forced access international reinsurance market to seek protection against their balance sheet. In this context, he reminded that, it is high time that the country has a Natural Catastrophe Pool(Nat Cat Pool).
Like terrorism pool, the insurance industry need to have a Nat Cat pool to meet the kind of situation arising out of Mumbai and Gujrat flooding, he said adding that terrorism pool with a capacity of Rs 500 crore is a successful mechanism in the country. Not only the pool is geared upto meet any financial losses due to unforeseen situation caused by terrorism, it has also helped the rates for covering events vulnerable to terrorism down in the domestic market. Mr Joshi suggested a capacity of Rs 4,000-5,000 crore for the Nat Cat Pool.