India’s terrorism risk pool pays high for 18 claims last year

Limit of Indemnity is capped at INR20b per risk/location.

India’s maximum scheme-paid losses in fiscal year 2022-2023 accumulated INR17.8m against 18 losses. Rates for insureds are determined by the pool's underwriting committee, whilst reinsurers' rates vary by risk class and location, reported WTW.

“The maximum loss paid out by the Pool was in 2008 for the infamous terrorist attack on the prestigious Taj Mahal Hotel located in Mumbai, India which is one of the most iconic luxury hotel destinations in India. The total quantum of loss was INR 3.76b.” WTW’s The Terrorism Pool Index 2024 reported.

In response to the 9/11 terrorist attacks and the subsequent withdrawal of terrorism cover by international reinsurers, Indian non-life insurers established the Indian Market Terrorism Risk Insurance Pool (IMTRIP) in 2002. 

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IMTRIP covers terrorism risk on property insurance policies for all non-life insurance companies in India, with premiums funded by members. 

IMTRIP covers various policies, including business interruption, property damage, fire insurance, and others. 

The Limit of Indemnity is capped at INR20b per risk/location, with excess loss reinsurance placed with pool members and overseas reinsurers.

Participation in the scheme is occasionally compulsory for insurers if coverage falls under IMTRIP's ambit. Insureds can purchase coverage for risks beyond IMTRIP's capacity from the private insurance market.

To access the pool, insureds need to buy a local policy in-country and follow dedicated policyholder wording and guidelines provided by IMTRIP. 

Insureds obtain coverage through their insurer, and claims are processed through the property insurer, with IMTRIP's involvement in settlements for losses exceeding INR2b.