Nuclear Pool: Private Sector Insurers Chip in with Rs 100 Crore
MUMBAI: Private sector general insurers Reliance General, ICICI Lombard and Universal Sompo, among others, have committed around Rs 100 crore as their contribution towards the Rs 1,500-crore nuclear insurance pool so far, which is being managed by GIC Re.
The total size of the nuclear pool, which was officially kicked off from April 1, is Rs 1,500 crore and half of this will be contributed by the four state-owned non-life insurers and the sole reinsurers GIC Re, which is also state-owned.
"We have received commitments for around Rs 100 crore from the private sector non-life insurers so far. We need a total of Rs 750 crore from the non-government sources, as the state-owned players have to chip in with Rs 750 crore to the pool," a senior official of GIC Re, which is the pool administrator, told, without naming any company and requesting he be not quoted.
The official further said he we will wait for more commitments to come in from the private sector and then we will approach the government for raising the balance amount from the market by issuing catastrophe bonds (Cat bonds), for which it has already appointed a consultant.
When contacted, a top Reliance General official said it has committed Rs 25 crore to the pool and added it is willing to contribute more in case it gets reinsurance protection.
"We have given our net capacity of Rs 25 crore to the nuclear pool. We are willing to contribute more if we get reinsurance protection," Reliance General chief executive Rakesh Jain told.
Another private sector non-life insurer, ICICI Lombard is also likely to chip in with around 3-5 percent of the total pool size of Rs 1,500 crore.
"We have committed to contribute somewhere between 3-5 percent of the total size of the pool. The pool is being formed, falling on the lines of terrorism pool. We hope it will also become sustainable and successful on the lines of terrorism pool in future," ICICI Lombard head for underwriting and claims, Sanjay Datta said.
Universal Sompo General Insurance has also committed Rs 10 crore to the pool.
"We have already committed to contribute Rs 10 crore to the nuclear insurance pool. We believe that the nuclear insurance pool is a good initiative by the government and everyone should participate into it," Universal Sompo chairman ON Singh said.
Asked if it will be commercially viable for the private sector companies, he said that "pool is just a beginning. It may require more capacities in future and then it may become commercially viable for us too."