October 13. The recent conflict in Israel has raised questions about its potential impact on insurance premiums, both locally and globally. It’s crucial to understand that the insurance industry is intrinsically related to socio-political realities around the world. Hence, geopolitical disturbances like warfare can have consequential effects on insurance premiums.
Reinsurance costs: Reinsurance, which is insurance for insurance companies, might also get more expensive because reinsurers may raise prices to balance out the heightened risk in the region. Subsequently, primary insurers could also ramp up their premiums to offset the cost of the higher reinsurance.
“Indian insurance companies often buy reinsurance to spread their risks. If global reinsurance costs rise due to a higher volume of claims stemming from the conflict in Israel, this could indirectly impact insurance premiums in India,” said Rahul M Mishra, Co-Founder and Director of Policy Ensure.
Source: Business Today
