Insurance industry officials said on Monday that renewal of most reinsurance done abroad normally falls due in April. Discussions on the new rates were already under way or expected to begin soon. With the massive damage inflicted by the Gujarat disaster likely to lead to heavy claims pay-out, the overseas reinsurers are bound to jack up their premia. Insurance companies have to distribute their risk against sudden, huge claims by insuring themselves in turn with reinsurers, retaining 20 per cent of the risk within the country and the rest abroad.

Officials said reinsurance was done on the basis of an earthquake map, and the risk perception of countries was invariably heightened by such calamities. The rating levels get affected, and premium outgo increases.

Even within the country, though there is some assessment of risk based on geographical location, the categorisation of a particular region gets changed in the aftermath of calamities of high magnitude. Latur, for instance, was once rated as a low-risk location, but after the earthquake there in 1993, it was brought up to Class I risk category, attracting the highest slab of premium.