Indian insurers are under pressure in the wake of recent events involving US and Iran, with reinsurers turning wary and increasing premiums on coverage for crude oil shipments to India.
"It is a tough period because treaties are also set to be renewed for providing reinsurance cover. Rates are going up and refiners have not agreed to the hike," a senior insurance executive told Moneycontrol.
Indian insurers largely depend on European companies to reinsure their risks. However, amid the current tensions, a majority have hiked premiums and have also refused complete coverage.
Reinsurers have increased their premiums by 20% for marine cover in the region. Though insurers too see the need to increase their charges, their customers, which are oil importers, are resisting the move.
US-Iran relations became more tense following a US air strike on 3 January that killed Iran’s top military official Qassem Soleimani. Iran responded by firing missiles at US troops stationed in Iraq. Further, it also accidentally shot down a Ukrainian passenger jetliner near Teheran, killing all 176 on board.
In a maritime warning, the US said that heightened military activity and increased political tensions in the Gulf region continue to pose serious threats to commercial vessels.