BBN Bureau
Task force to study issues faced by life insurers, reinsurers
HYDERABAD/July 12-2022: Â Challenges faced by the insurance industry in ensuring reinsurance support in view of the low insurance penetration in India was the key area of discussions at the second bi-monthly meeting organised by Insurance Regulatory and Development Authority of India (IRDAI) on June 30 in Hyderabad.
Heads of Life Insurers and Reinsurers attended the ‘Bima Manthan’, one of such initiatives aimed at continuous engagement of IRDAI and Insurance Industry heads.
During the financial year 2021, India’s life insurance penetration stood at around just three per cent, while the non-life insurance penetration was much lower at one per cent with the overall penetration at about four per cent, according to reliable reports.
IRDAI has been taking steps to increase insurance penetration in India and has launched various initiatives with the broad objective of ‘Insurance for All’.
A 7-member Task Force was constituted with Naveen Tahilyan, the CEO & MD of Tata AIA Life Insurance as the chairman, to examine the issues in the industry in detail and to sort out the issues between Life Insurers and Reinsurers.
The other members in the task force include BC Patnaik, MD of LIC of India, Hadi T Riachi, CEO of Swiss Re India, Srinivasa Rao, MD (life) of Munich Re India, A Ramana Rao, CGM, Reinsurance Department, IRDAI, etc.
Terms of reference
The Terms of Reference for the Task Force include, Stabilisation of Reinsurance rates; Applicability of compliance requirement with respect to claims, social & rural sector obligations, TAT etc. on reinsurers; Concerns with respect to delay in quotes by reinsurers; Capacity constraints with reinsurers; Provision of Facultative Reinsurance support, etc.
In the last two years, the impact of global hardening was felt in the life insurance market as well with many domestic insurers hiking their term policy rates.
According to industry experts, the hardening cycle has continued as there has been a risk aversion triggered by the volatility in global markets, and the Ukraine war has added to the uncertainty.
