Reinsurers firm on risk underwriting

Chennai: Reinsurers operating in India are forcing disciplined risk underwriting practices in primary insurers in the life and non-life sectors, rather than the latter's promoters. Recently, life insurers decided to hike their premium rates for term insurance policies following pressure from their reinsurers.

While the life insurers attributed the increased claims to Covid-19 related deaths, industry officials told IANS that the term insurance portfolio has been suffering losses and reinsurers have been insisting on rate hike since 2018 onwards."The term insurance portfolio of life insurers showed higher claims than what was initially projected. The life insurers designed their term insurance product targeting a certain segment with a certain risk profile and signed up reinsurance agreements with reinsurers," an industry official told IANS preferring anonymity.

Later, the term insurance policies were sold to all kinds of people and life insurers started settling the claims on the comfort that they will get reimbursed from their reinsurers, ringing alarm bells in the latter.