Insurance Premium: In today’s fast-paced world, insurance has become a part of everyone’s life. Be it insurance of life or health or of a house or vehicle. Insurance has its own importance everywhere. And if you have also got any kind of insurance, then this news is important for you. Because now this inflation is going to hit you again. Yes, insurance premium is going to be expensive for the common man. There can be an increase of 10 to 15 percent in this. This will directly affect the budget of the common man. According to officials of the country’s general insurance companies, insurance premiums for properties, liabilities and motor cover are expected to increase by at least 10% in the coming months due to the increase in reinsurance rates.
Why is there an increase of 10-15 percent in insurance?
Inflation is continuously increasing in the country. The people who are facing the brunt of inflation are not getting any relief for the time being. Constantly increasing the interest rate of banks, uncertainty of climate change and mainly the reason for expensive insurance premiums is believed to be the damage caused by the war in Ukraine. Affected by the Ukraine war, reinsurers around the world have increased premiums by 40 to 60 percent. It was told by the general insurance companies that in the financial year 2023, the share of auto insurance premium in the total business of general insurance is Rs 81,292 crore. Due to the increase in the cost of re-insurance, it is believed that there will be an increase of 10-15 percent in auto insurance in the coming time.
The cost of insurance companies has increased
Explain that there are 24 companies involved in the general insurance industry of India. These companies have a total share of 84 percent in the industry. These companies buy huge insurance cover to avoid any kind of liabilities and any huge loss in future. Insurance cover is purchased on behalf of these companies to protect against fire, maritime peril and engineering and commercial interruptions. The increase in interest rate by western central banks by 4.5-5% in the last one year alone has increased the cost of capital for reinsurers. Reinsurers have also been hurt by the uncertainty of climate change. In such a situation, it is believed that the increase in the rate of reinsurance done by the insurance companies is certain.
motor insurance is mandatory
Motor insurance is mandatory for all vehicle owners in the country. Motor insurance alone has contributed around Rs 81,292 crore in premium to the total business of the general insurance industry in FY2023. According to industry experts, with the recent increase in reinsurance cost, the premium rates for buying insurance for cars, bikes and commercial vehicles are likely to increase by 10-15 per cent in the next few months.
