Insurance companies in India are retaining more group term insurance business in their books as global reinsurers are concerned about higher claims incurred in this branch of business.
The challenges posed by reinsurers have prompted insurers to reassess their risk management strategies, and as a result, retention by life insurers has increased, reported Business Today.
Ms Nymphea Batra, managing director and CEO of Guy Carpenter India, said, “Retentions have increased from 10-15% to up to 40%.”
Mr Rushabh Gandhi, deputy CEO at IndiaFirst Life Insurance, said, “In recent times, the insurance industry has experienced a significant surge in claims, with almost all insurers receiving approximately three times more claims compared to previous years.”
This situation has prompted an increase in reinsurance premium rates by 30% to 40% in India.
Post the COVID-19 pandemic, reinsurance companies are tightening underwriting practices, revisiting non-medical limits, and increasing term insurance rates in India. Some insurers have increased their retention to ease the increase in mortality premiums demanded by many reinsurance companies.
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