July 27th, 2009

Global Terror Update: India

Posted at 12:59 AM ET

global_cover141x141Following international reinsurers’ withdrawal of cover for the risks of terrorism and sabotage after September 11, 2001, private non-life insurance companies pooled their resources to establish a terrorism risk insurance pool. Terrorism cover through the pool is offered as a buy-back. There is a separate rate for terrorism cover, depending on the type of risk and the sum insured, which is approximately 0.03 percent to 0.05 percent of total sums insured. Aggregate losses to any one location for all Indian insurers will be limited to INR5 billion (USD113 million), and any further loss will involve prorating all recoveries. Excess of loss retrocessional coverage is purchased on the international market. The General Insurance Corporation of India manages the pool on behalf of all non-life insurance companies. 

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