The Insurance Regulatory Development Authority (IRDA) is likely to increase the premium on terrorism insurance risk. The deliberations in this regard have started, following the recent terror attacks on Mumbai. The matter to cover house or commercial establishment under terror insurance had believed to be discussed in Hyderabad on Monday by IRDA.

The common terrorism insurance pool was formed nine years ago, which stipulates Rs 1,200-crore insurance cover. Insurance companies can suffer huge losses in future as terrorist attacks are increasing. Mumbai terror attacks would badly hit the insurance firms. The attack on Taj and Oberoi hotels would cause loss of around Rs 800 crore, putting huge burden on the insurance firms. Besides Taj and Oberoi hotels, other buildings such as Air India, Bombay Stock Exchange, Pancharatna at Opera House (a major diamond trading establishment), World Trade Center at Cuffe Parade, Swaminarayan and Siddhivinayak temples are covered under the terror insurance.

The country has a total of 12 public and private sector insurance companies that provide standard terrorism insurance cover on the basis of standard fire policy. The premium is Rs 0.21 per Rs 1,000 of the total amount insured and goes to common kitty of insurance companies. There is a demand to increase the premium by at least 50% to save the interests of insurance companies.