India's general insurers are trimming the steep discounts they had been offering on fire and property risks after a run of large catastrophe claims. The industry has estimated losses of nearly Rs 5,000 crore from the severe flooding and waterlogging that hit Gujarat in July 2026, with most of the claims falling on property insurance. Surat, Navsari and Valsad were among the worst-affected districts. Floods in Assam and Odisha, and accidents at some manufacturing units, have added to the pressure.
Insurers are not raising the base natural catastrophe (NATCAT) rates. Instead they are cutting back the unusually deep discounts that became common during a long, highly competitive pricing cycle. The Insurance Regulatory and Development Authority of India (IRDAI) had already warned general insurers against aggressive fire-insurance pricing after complaints of discounts of up to 99 per cent on large industrial risks. It said such pricing threatens insurers' financial health and underwriting discipline. According to Bajaj General Insurance, as reported by Business Standard, the result is that property premium rates are hardening by nearly 25 to 30 per cent. Some insurers have also set a minimum rate for the NATCAT portion of fire cover.
For much of the past year, plentiful reinsurance capacity kept prices low. That capacity came from the state-owned reinsurer, foreign reinsurance branches, new domestic reinsurers and reinsurers operating from GIFT City. Recent losses are now reversing that trend. Industry experts say NATCAT pricing is rising faster than FLEXA (fire, lightning, explosion/implosion and aircraft) pricing, although both are moving up. Because pricing is not fixed across the market, the size of any increase will vary from risk to risk.
What This Means for You
If you own or manage a factory, warehouse, mall, hotel or large housing society, your next fire or property renewal may come with less generous discounting. This applies especially in flood-prone or coastal areas, and even if your own claims record is clean. Insurers are responding to losses across the whole sector and to regulatory pressure, not only to individual risk profiles. A higher renewal quote does not necessarily mean your risk has worsened. It may simply reflect a return to more sustainable pricing.
What to Check in Your Cover
- Confirm your sums insured reflect current reinstatement values for buildings, plant and stock. Under-insurance becomes more costly when discounts shrink and average clauses apply.
- Review your flood and NATCAT sub-limits and deductibles, particularly if any part of your property sits in a flood plain, a low-lying industrial belt or a coastal zone.
- Check whether your business interruption cover's indemnity period is long enough for a prolonged shutdown after flood damage, not just the physical repair time.
- When you receive a renewal quote, ask how much of any change comes from reduced discounting and how much from changes in cover or terms, so you understand what you are paying for.
- Revisit risk-mitigation measures such as drainage, flood barriers, and raised electrical and server rooms. These can support better terms at renewal.
Every renewal is different, and the right response depends on your property, location and risk profile. Speak to a MILES advisor to review your fire and property cover ahead of your next renewal.
This article is for general information only and is not insurance advice. Policy terms, conditions and exclusions vary; please speak to a MILES advisor about your specific situation.