India 1.4 renewals to be particularly interesting: Peak Re’s Salian
November 7 2024 by InsuranceAsia News
Regulatory changes and significant growth in infrastructure, cyber and surety are the main factors that will shape the 1.4. 2025 renewal in India, Sudhir Salian, director and head of next-gen insurance solutions and head of India, tells InsuranceAsia News (IAN).
“The 2025 renewal season in India promises to be particularly interesting with several moving parts given the change in regulation, changes in the leadership in more than a few companies and that the property pricing in the direct market has dropped sharply,” Salian said, adding that “it will be really interesting to see how the reinsurance market responds”.
The Insurance Regulatory and Development Authority of India (IRDAI) has lifted restrictions on commercial terms in treaties, allowing reinsurers to reintroduce restrictive methodologies.
The market has largely shifted towards quota share structures, with fewer players using surplus arrangements, which will “definitely be a subject of discussion during renewals and risk selection”.
“The primary drivers for the insurance market [in India] are essentially property, engineering, and to a lesser extent, liability and agriculture,” Salian told IAN.
Property and engineering account for roughly 15% of the market, he noted, and large government health schemes also play a significant role.
“The primary drivers for the insurance market in India are essentially property, engineering, and to a lesser extent, liability and agriculture.” Sudhir Salian, Peak Re
Infrastructure growth is generating increased premiums from various projects, driving demand for (re)insurance. This includes engineering treaties, project PI, design, and surety.
Another factor supporting surety is government encouragement for insurance companies to provide surety capacity to contractors.
“The government, particularly the Ministry of Transport, is encouraging insurance companies to provide surety capacity to contractors who bid for contracts,” Salian said.
“There are constraints on banks’ working capital limits for providing guarantees that contractors can avail, thereby creating significant demand for this product offered by insurers,” he explained.
The cyber insurance sector is experiencing significant growth, with demand outpacing supply. The market is expanding into large and medium enterprises, with reinsurers playing a crucial role in supporting these efforts.
Salian noted: “Customers that do a lot of international business are required to have a cyber policy in place, publicly listed companies require cyber cover.”
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