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Business Standard
12-05-2025
- Business
- Business Standard
Indo-Pak tensions trigger rise in war insurance cover enquiries from firms
The heightened tension between India and Pakistan in recent weeks has prompted an increase in enquiries regarding 'war cover' from Indian companies and individuals alike, said industry insiders. That said, insurance brokers pointed out that 'war' is typically excluded from insurance coverage, except in the case of marine and aviation policies. According to insurance experts, commercial lines, including property, fire and other segments, do not cover 'war', as war on land is historically a standard exclusion. However, 'war cover' may be bought under marine hull and cargo, and aviation segments. The geopolitical tensions between the two countries have led customers to enquire more about war cover for infrastructure. Insurers believe that if war is covered under commercial lines, it would trigger higher claims for insurance companies, resulting in losses. They also say such events are difficult to predict, making modelling challenging for insurers. 'Post the India-Pakistan tensions, there have been a few inquiries from our clients on war cover. Unfortunately, there has been no solution. Globally, war is a standard exclusion in other policies – property, liability, etc. So if damage occurs due to war-like situations, it will not be covered. Insuring critical infrastructure involves huge sums, and if damaged, can severely affect an insurer's balance sheet. Hence, these are intentionally excluded,' said Rushik Patel, Associate Director – Liability, Edme Insurance Brokers. As policyholders' queries on war cover increase, insurance companies are also looking to offer alternative solutions, including protection against political violence or standalone terrorism cover. Political violence provides cover for war-like situations, and in the current case, war was not declared. It also provides cover for sabotage and terrorism. There is also standalone terrorism cover. If policyholders want insurance beyond these, they will have to approach the international market. 'There has been significant anxiety in recent days, and that has led to multiple enquiries. Clients want to assess whether the current war-like situations are covered under their existing policies. If not, they're seeking to understand what alternative solutions are available. Corporates are looking at alternative solutions including political violence cover or standalone terrorism cover,' said Deepak Madan, Head – Commercial Lines, Large Account Practices at Prudent Insurance Brokers.
Time of India
08-05-2025
- Business
- Time of India
Insurers get queries: How much does war cover cost?
MUMBAI: Insurance companies are receiving enquiries for quotes on war risk insurance cover hours after India carried out Operation Sindoor "Enquiries have gone up, but underwriters are reluctant to provide war risk cover for landed property after some kinetic action has already taken place. In the case of cargo, though, war risk cover is available for the time the goods are in transit in the vessel ," said Sanjay Radhakrishnan, CEO, Edme Insurance Brokers. He added that in the case of property on land, war risk covers also have clauses that make the current events as proximate to war and hence will be excluded from standard cargo policy excludes war risks, which have to be separately covered. Insurers include the war risks through an endorsement by charging additional premium. Usually, when geopolitical tensions rise, insurers hike the war risk premium on cargo. War risk premiums are typically subject to reinsurance arrangements that insurers have with their respective reinsurers. We saw in the past, during times of war, that reinsurance treaties are put on hold and war covers may be withdrawn. Such a situation could possibly lead to higher rates of marine cargo insurance ," said Amarnath Saxena, chief technical officer, Bajaj Allianz General Insurance The London-based Joint War Committee (JWC) continuously monitors global geopolitical developments. If a region becomes high-risk (due to war, piracy or attacks), the JWC updates its list of high-risk areas . Insurers are notified of the updated risk status. For cargo transiting these regions, insurers may issue a notice of cancellation or revision of existing war risk cover, often with a 7 to 30-day notice period.
