Insurers eye bigger Marine pool for Russia shipments

India’s general insurers are looking to set up a larger marine insurance pool to cover the risks of transporting crude oil, edible oil, project machinery and fertiliser from the war-torn Russia-Ukraine region. This is expected to facilitate trade as the West ratchets up sanctions on Russia.

A senior official said that both the government and the Insurance Regulatory and Development Authority of India (IRDAI) are keen to develop more indigenous capacity for maritime insurance risk.

Last year, general insurance companies led by GIC Re had set up a cargo pool for fertilliser imports with a net capacity of over Rs. 500 crore. That pool did not generate any losses, which has encouraged insurers to explore more capacity and better rates. “While the cargo pool has performed well, the ongoing war has exposed other shipments to vulnerability as foreign insurers are unwilling to take the risk because of the sanctions imposed,” said the official.

The state-run general insurance companies are expected to launch the pool that other private players can join later.