Your general insurance premium outgo may get more from January 1 as there is an increase in reinsurance rates. These rates are the charges that insurers have to pay to secure a cover and the extra cost is passed to customers as higher premium charges and as the renewals of reinsurance contract happens from January 1, the same will be passed on to customers from that day.
Insurers need to buy the cover for them just to cover the risk in case they are turned to for a bulk claim. In a case when they confront a larger claim their appetite for risk goes down and premiums trend on the higher side.
The premium of general insurance are decided basis both the internal and outer factors as these reinsurance firms out of India as well as internationally. In general all of the general insurance categories including liability insurance, fire insurance, motor insurance as well as group health covers will see a hike in premium rates by as much as 10-15%.
Also, as in the current situation, the higher claim in one category tends to impact overall claim losses for insurance companies. In FY20, insurance companies have been hit hard due to higher crop insurance claims. Rates for comprehensive motor insurance policies may also be hiked from next financial year.