India has approved a 129.8-billion-rupee ($1.4 billion) guarantee for a maritime insurance pool, a
minister said on Saturday, as wars and sanctions prompt insurers to withdraw cover, threatening trade flows.
The pool will run for 10 years and can be extended by a further five years, Information and Broadcasting Minister Ashwini Vaishnaw said.
“There was a need for a domestic maritime risk covering pool to maintain sovereignty and
continuity of trade in face of withdrawal of coverage due to sanctions or due to geopolitical tensions,” according to a statement issued by the government.
Several major reinsurers including India’s only state-backed reinsurer GIC Re have either withdrawn cover or sharply raised premiums, leaving the industry with li
mited reinsurance support, Reuters reported earlier this month.
Reinsurers provide vital support to insurers by helping them spread risk. Among issues leading the industry to scale back coverage are the Iran war and Western sanctions on Russia.
The insurance pool will cover all maritime risks, including hull and machinery, cargo and war risk, the statement said.
Policies will be issued by member insurers using combined underwriting capacity of about 9.50 billion rupees.
Inflation-Linked Allowance Hiked
The government said in a separate statement that it had also raised inflation-linked allowances by 2%, starting January 1.
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Dearness allowance and dearness relief are government-mandated payments designed to offset inflation for employees and pensioners. The allowances are revised twice a year based on the consumer price index.
India’s CPI rose to 3.40% year-on-year in March from 3.21% in February, government data showed earlier this month.
Price pressures have increased due to higher cooking gas costs, although government tax cuts have shielded consumers from the full impact of higher global oil prices.
Picture this scenario. A couple meets and they go through the courting period. Both parties try to look their best and pay extraordinary attention to each
other. At some point they get engaged and formalize their relationship. They talk with each other often about their goals and plans for the future. For a fe
w years the couple gets along really well, and the long-term future looks promising.
But after a few years they slowly start to drift. The attention they pay each other diminishes, and s
ome promises are not kept. The two now seem to be going down separate paths. Communication now has trickled down to just the formal business that keeps the
couple together. After a while the two realize they no longer share the same goals, and they have little in common.
This is a common situation. Marriages often fail because the couple does not maintain the same energy that brought them together. A truly successful long-term
relationship requires continuous effort by both sides. This applies to personal relationships as well as
business relationships. The scenario outlined above is what happens quite often to agencies and their carriers.
