Energy major ONGC has driven a hard bargain to renew its insurance and re-insurance covers, at USD 20 million -- a discount of 35 per cent -- for its offshore assets valued at USD 34 billion from state-run United India Insurance and two global re-insurers.
The insurance cover, due for renewal on May 11, has been renewed in the London markets, market sources said.
Global general insurance prices have been heading south as claims have been lower unlike the previous year wherein claims were higher due to many catastrophes and aviation accidents.
"ONGC has renewed its insurance account for its offshore assets worth USD 34 billion for a premium of around USD 20 million, more than 35 per cent lower than what it had paid for existing cover of USD 33 million," industry sources told PTI.
The cover was underwritten by United India Insurance, while the reinsurance cover has come from two global reinsurers -- Endurance and Aspirin -- which outbid GIC Re, the country's sole reinsurer to bag the ONGC account until now, sources added.
ONGC, which holds the biggest insurance policy in the country at USD 33 million, had last week floated a tender to underwriters to primarily cover its offshore assets.
Air India paid USD 27 million for its cover in the outgoing fiscal, making it the second biggest account. The cover for large corporates like Reliance Industries, Jet Airways among others are about to be renewed and they may get benefit of the softening general insurance market. However, airlines may be forced to shell out more following the last week's Germanwings airline crash.
The Chennai-based United India Insurance, which was covering the oil and gas major for the past three years, was able to retain the account.