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Terrorism

Insurance in India

Terrorism Risk Insurance At a


Glance
Introduction
Terrorism Risk Estimation
Terrorism Risk Insurance
In India

Terrorism Risk Insurance At a


Glance
Indian Market Terrorism Risk
Insurance Pool (IMTRIP)
IMTRIP Insured and Excluded
Classes
IMTRIP 10-year History.

Introduction
O Terrorist attacks so far in India have resulted

in damage to public and government


property but damage to corporate property
has been minimal. Hence, monetary claims
have not been very
significant until the Mumbai attacks
changed it all. The total insured-property
losses from the November 26 terrorist
attacks are expected to hit well over Rs. 600
crores, according to industry experts.

Terrorism Risk
Estimation
O From an insurance viewpoint, terrorism risk

is very different from other risks typically


insured, as it is impossible to determine the
probable number of events (frequency) likely
to result in claims and the maximum cost of
these events. In addition, no one knows what
the worst- case scenario might be. Since the
numbers of terrorist attacks have not been
very large, there is little data on which to
base estimates of future losses, either in
terms of frequency or severity of the loss.

Terrorism Risk Insurance In


India
O Terrorism cover is an add-on cover

provided under Property Insurance


Policies by endorsement
O Optional to the insured
O Same premium rates are charged by all
insurers - range from 0.08 to 0.25 per
mille charged on Total Sum Insured
(MD+LOP)
O Sliding scale of premium rates
depending on risk classification
(industrial/non-industrial/residential) for
different slabs of Sum Insured

Terrorism Risk Insurance In


India
O Deductible: 0.5% of the total sum insured

(MD+LOP) subject to certain minimum and


maximum limits depending on risk classification
O Specified Limit of Liability per location (presently
INR 10,000 mn)
O Capacity is provided by Indian Market Terrorism
Risk
Insurance Pool (IMTRIP) up to the
specified limit of liability
O For cover limit beyond Pool capacity, insurers
seek facultative reinsurance support from
international market

Indian Market Terrorism


Risk Insurance Pool
(IMTRIP)
O Initiative by Indian non-life insurers in 2002
O Response to hardening of international

market for terrorism cover post 9/11


O Entire terrorism risk on Property Insurance
policies written by all Companies is
reinsured by all Pool members
O All non-life insurance companies operating
in India are members of the Pool. Present
strength is 21.
O GIC Re is the Manager of Pool

Indian Market Terrorism


Risk Insurance Pool
(IMTRIP)
O Terms of cover, premium rates, deductibles are
determined by Pool Underwriting Committee
O All members provide capacity to the Pool in
specified shares
O Pool takes reinsurance protection on excess of
loss basis
O Pool results are shared among Pool members in
same proportion as the capacity provided
O Capacity offered by Pool is presently INR
10,000 million [about USD 185 million] per
location (maximum limit of indemnity)

IMTRIP Insured Classes


O Fire insurance
O Industrial All Risks insurance
O Fire section of package insurance policies
O Property section of Engineering/Project

insurances including EAR, MCE, SCE, CAR, CPM,


EEI, CECR
O Property Sections of Miscellaneous policies
O On-shore assets of Port Package policies & onshore drilling rig equipment

IMTRIP Classes Excluded


O Risks other than property in Fire &

Engineering class
O Risks other than property sections of

Miscellaneous class viz., Motor, PA,


Liability, Cash-in-Transit, Bankers
Indemnity, Mediclaim, etc.

IMTRIP 10-year History.


Pool Membership
No. Of Members

11

14

16

19

21

Growth in Capacity
(Limit of Indemnity/Location)
INR in million
10000
5000
2000

3000

6000

7500

Terrorism Losses In India


O Over 15 major terrorist attacks post

11/9/2001
O Over 800 deaths Highest : Mumbai
train blasts 2006 and Mumbai terror
attacks 26/11/2008
O Mostly uninsured losses, terrorism
insurance cover being optional

Indias 9/11 Terrorist Attacks


In Mumbai 26/11/2008
O Prestigious five-star hotels, restaurants, railway

station, residential building attacked & damaged


O Largest ever insured loss due to terrorism in
India may be seen as an exception though
exposure exists
O Over 180 deaths
O The affected locations were covered by the
Indian Terrorism Risk Insurance Pool
O All claims settled by Indian Terrorism Risk
Insurance Pool for total amount of INR 3769
million

MAY OUR WORLD BE


FREE FROM
TERRORISM
THANK YOU

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