The Hotel Association of India (HAI), the umbrella organization for the Indian hotel industry, has written to Finance Minister Nirmala Sitharaman highlighting the sharp rise in insurance premiums for hotel properties in recent years. years as several reinsurers, including the state-owned General Insurance Corporation (GIC Re), owned by General Insurance Corporation, increased its premiums by almost two and a half times compared to the 2018-2019 financial year. In the letter, they urged the government to bring insurance premium rates back to where they were in the 2018-19 financial year.
The association alleged that insurance companies are not allowed to offer different rates to hotel properties based on the risk category of the insured, thereby putting all hotels on the same level and leaving no room for differentiated premiums according to the quality of the risk taken.
“For this reason, better managed hotel properties that have invested more in security and prevention measures against various risk exposures are charged at the same premium rates as others,” the letter states. Previously, insurance companies offered premium rate discounts for property insurance based on their respective underwriting parameters.
The tourism and hospitality sector has been hit hard due to the Covid-19 pandemic, leading to revenue losses. “Now is the time to incentivize the industry to revive and grow, but the current very high insurance premium rates compared to pre-FY 2018-19 are a major hurdle,” he said. said MP Bezbaruah, secretary general of HAI.
“Their two-and-a-half-fold increase puts additional pressure on hotel chains, especially those that have invested heavily in safety and prevention protocols. At a time when the industry is showing signs of recovery, such premium rates imposed on the sector are a setback for the entire industry,” he added.