Reinsurance renewals likely to drop 10% in FY26

The reinsurance renewal rates are likely to drop by up to 10 per cent in financial year 2026 (FY26), due to higher reinsurance capacity and better loss experience of the insurers, sources said.

- AATHIRA VARIER

However, the new norms on collaterals for the cross-border reinsurers remain a key concern in this renewal session.

Last year, the reinsurance rates saw a marginal increase of around 5 per cent after adjusting for risk, which is expected to see up to 10 per cent drop this year.

During the April reinsurance renewals, Indian insurance companies transfer a portion of their risk portfolios to reinsurers by paying a certain premium to reduce the likelihood of paying a large obligation in the form of a claim.

Globally, these reinsurance contracts between primary insurers (cedants) and reinsurers are renewed in January. During this session, the reinsurers were more comfortable offering coverage on an excess of loss basis.

For Indian insurers (cedants), this is translating into more favourable negotiations on the proportional and non-proportional reinsurance arrangements.

Batra added, "Overall, the Indian market and cedants benefited especially for non-loss impacted portfolios.