BL reported that general insurers expect fresh premium collections from the marine cargo segment to grow at a much lower rate than expected because of a fall in Indian exports. With US, UK and other European countries facing recession, there has been a fall in exports from India to these countries.
As per report, the reduction in demand is reflected in the country’s export numbers, which have fallen for October and November and are expected to decline in December as well.
According to the Ministry of Commerce, in October, the exports declined by 12.1% compared with the corresponding month in the year ago period. In November, export growth declined by 9.9%. However, insurers are already reeling under pressure due to a slowdown in sectors such as auto, textiles, realty and metals.
Mr Sandeep Bakshi CEO & MD of ICICI Lombard General Insurance Company said that “Though the marine insurance premiums are still growing, the growth rate is below expectations.”
Mr Bakshi said that “The marine premiums are directly dependent on the velocity of corporate growth. The collections are linked both to volumes of goods and the pricing. And there has been a correction on both these fronts. While volumes have seen a reduction, rates have not seen an increase.”
He said that with the fire insurance premiums coming down, there was an expectation that the marine insurance rates would register an increase. But, the increase has not been much.
Mr G Srinivasan CMD of United India Insurance Company said that “With exports falling, the marine premium collections have been affected. In future, covers like marine cargo would see an increase in rates depending upon the loss experience of companies.”
Mr V Ramasaamy CMD of National Insurance Company said that “The growth rates of marine premium have come down, in line with the fall in exports. After detariffing of the marine insurance segment a few years ago, the marine portfolio had decreased for a lot of companies with a fall in the premium rates, including ours. The rates are now looking up to a certain extent.”
(Sourced from Business Line)
