India’s state owned insurer, New India Assurance, has secured the largest single insurance transaction in the country’s history from conglomerate Reliance Industries (RIL), according to PTI news.
In the historic deal, New India will offer RIL combined cover for the coming fiscal year with a premium fixed at Rs 500 crore (US$76 million) buying access to over 2.5 trillion Rs (US$38 billion)- making RIL the record-holder for India’s largest combined cover purchase.
According to sources, approximately 90% of the insurance cover bought by RIL has been reinsured.
The cover will insure RIL’s two 60 mt refineries in Jamnagar and its offshore assets in the Krishna-Godavari Basin, according to reports.
Last year RIL’s insurance cover was spread across two insurance companies, with New India taking offshore cover and ICICI Lombard providing cover for the Jamnagar refinery.
But this year, for the first time, New India offered to insure both RIL’s onshore and offshore assets, taking over insurance of RIL’s Jemnagar refinery from insurer ICICI Lombard.
The comprehensive cover offered in the deal includes fire, breakdown, and loss of profit risk cover.
With India’s record economic boom driving re/insurance growth, this could well be the first of many similar large-scale transactions, but as reinsurancene.ws recently reported, the extent to which such deals will be made available to the international community, still remains a question.
