How To Cope With Rising Term Insurance Premiums?

Some time ago, Munich Re, a large reinsurer in the Indian market, informed a few insurance companies that it would hike its reinsurance premiums by 30-40 per cent. It also asked insurers to tighten their underwriting standards. With the leading reinsurer hiking its reinsurance premiums, insurers are likely to follow suit with a hike in their insurance premiums.

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Term insurance premiums in our country have declined to very low levels owing to high competition in the marketplace. Moreover, in the absence of data, private insurance companies made certain assumptions regarding mortality rates. Those assumptions have proved to be too optimistic. The actual claims experience has been higher. The Covid pandemic made matters worse for insurers over the past 18 months.