Get ready to shell out more for motor, health & fire insurance
In recent meetings with insurance industry representatives, the finance ministry cited mounting losses, asking state-run insurers (including Oriental Insurance, United India Insurance, New India Assurance and National Insurance who together command 58% of the R53,000 crore non-life business) to consider revamping premiums, sources told FE. The ministry said instead of cutting prices to beat competition, premiums should take into account the companies' expenses, ability to pay claims, risk assessment and incurred losses.
“The market should harden soon. Initially, one can expect a 2-5% hike across classes. Prices will depend on each company's losses,” said an official from leading PSU non-life insurer. The official said companies are reviewing their premium prices by analysing their losses, cash flow, management expenses, risk assessment and costs of acquiring business.
A top official of a private sector insurer explained that insurers are increasingly considering acquiring only clients adopting best practices — such as plants with proper protection against break out of fire. Insurers in the motor segment are also doing a region-wise study across India on incidents of accidents