Following the terrorist attack at Pahalgam in April and the next ceasefire earlier this month, insurance coverage premiums for warfare and political violence cover out there for Indian corporations have risen “significantly,” in accordance with insurance coverage brokers.
Though Indian insurers will not be providing any property insurance coverage insurance policies for warfare and conflicts to Indian corporates, insurance policies protecting warfare and political violence are being made out there from worldwide reinsurers which had been issued with stricter limits and circumstances.
Deepak Madan, Head Commercial Lines, Large Account Practices at Prudent Insurance Brokers stated, “Property insurance policies for war and conflict-related situations are typically excluded from insurance cover so there was no impact at all in premium. And thus geopolitical tensions usually do not influence premium rates.”
“But several companies had purchased war and political violence coverage which is a reinsurance-backed cover, available primarily through international markets. The availability and terms of coverage also vary according to the property’s location, particularly in high-exposure areas such as Jammu and Kashmir and other border regions,” Mr. Madan stated.
Hari Radhakrishnan from Insurance Brokers Association of India (IBAI) stated for the reason that geopolitical threat had gone up significantly as a result of varied conflicts resembling Ukraine, Gaza, Iran and wider Persian Gulf, and Indo-Pak., there had been a downstream affect on insurance coverage and reinsurance markets.
“Since these conflicts can affect oil prices or commodity prices, there can be impact on underwriting and claims in the form of increased costs, increased restoration periods, logistical challenges. Insurers and reinsurers have to factor these into their operating considerations,” he stated.
He stated for the reason that Indo-Pak. battle is new and nonetheless growing despite the fact that there’s a pause in lively hostilities or dwell motion, the affect is perhaps much less seen in the instant time period however may very well be extra seen on a longer-term foundation.
On the affect on the provision chain as a result of disruptions attributable to geopolitical developments, he stated, “When there are supply chain disruptions, certain insurance products such as trade credit insurance, contingent business interruption covers [coverage for suppliers and customers premises] , see a demand spike which is also being witnessed.”
Published – May 21, 2025 10:25 pm IST
