GIC Re increases rates of fire premium

General Insurance Corporation (GIC Re) has announced a hike in its premiums for the property insurance segment all over 291 occupancies under the fire portfolio. The increased premium came in effect from January 1, 2020. According to the information from sources, through a circular GIC has notified the general insurance companies about its intention to increase premiums. The IBB rates will be followed for all occupancies. “Premiums for public sector insurers may go up by 50 per cent and for private sector general insurers, it may rise 22-25 per cent,” said the source. GIC has informed insurers that they will have to follow the burn cost concept, which is basically the break-even rate. An executive of a private sector general insurance company said, “GIC is saying that general insurance companies should follow the burn cost as a minimum price. So, structurally, we are now moving to risk-based pricing. In the near term, when risk-based pricing is adopted, there will be occupancies where premiums will go up.”