ICICI LOMBARD

ICICI Lombard has emerged as the front runner for a fresh tender that SAIL has invited for its property and terror cover. The cover,


consisting of two components — mega all-risk insurance and a terrorism cover — carries a sum assured value of Rs 12,200 crore and Rs 11,600 crore, respectively.



According to an official involved in the bidding, “The original bidding procedure had to be scrapped since the L2, L3 and L4 bidders declined to offer co-insurance support as they found the L1 bid (Future Generali’s bid) abysmally low during the first round of bidding,” said the official. ICICI Lombard will now be offered 70% of the cover and SAIL has decided to invite another tender for the rest 30%.



In insurance lingo, when more than one insurer comes together to offer a cover, it is termed co-insurance. The company that offers bulk of the cover is the main insurer while others offer co-insurance. An insurance policy is termed mega cover when the sum insured at a single location exceeds Rs 2,500 crore. The SAIL cover is one such. According to the terms of the original tender, L1 was supposed to get 50% of the cover, while L2, L3 and L4 were to take 25%, 15% and 10% of the account, respectively. This means they would have received premiums in that ratio at the rate specified by the L1 and claims — if any — would have been paid by them in the same ratio. HDFC Ergo had emerged the second-lowest bidder (L2) at about Rs 7 crore followed by New India Assurance and Oriental Insurance.