Fire, health insurance likely to become dearer

After hitting the bottom in the first six months of 2009, rates of most non-life insurance products increased during the second half of the year.

In the absence of new players, rates are likely to move further up and customers are likely to see an increase in premiums in most segments, according to a study by Marsh-insurance broker and risk advisor.

The general liability market has been very competitive in recent times. Rates had hit a low at the beginning of 2009 but in the latter part of the year, they started to increase.

In contrast, the commercial insurance market in most of Europe, the Middle East and Africa (EMEA) remained stable in the second half of 2009. The report analysed 10 major commercial insurance lines across 42 countries, including India.

 

Premium on property increased by up to 10 per cent during the second half as insurers ceased to offer high discounts. Similarly, premiums on healthcare and casualty increased by up to 10-20 per cent as it became unsustainable for players to discount it. Prior to detariffing, group mediclaim policies were doled out as freebies with fire and engineering policies.

Moreover, premium on professional indemnity and directors’ and officers’ liability (D&O) increased by up to 10 per cent and up to 20 per cent respectively.

On the other hand, EMEA countries saw reduction in premium rates in most segments. While premium on property reduced by 40-50 per cent, motor saw a decrease of 40-50 per cent. D&O rates also fell by up to 10 per cent, professional indemnity by up to 10-20 per cent and casualty rates by 20-30 per cent. Premium on employers’ liability and workers’ reduced by up to 20-30 per cent.

During the same time, India witnessed 10-20 per cent increase in trade credit insurance rates while the EMEA countries saw an exception in case of trade credits. The report said that increases in trade credit insurance coverage ranged from more than 50 per cent in Greece and Lithuania. While the average increase in the UK and Ireland ranged from 10-30 per cent.