Come 2008 and car insurance premium is set to fall by anything between 5% and 10% with the Insurance Regulatory and Development Authority (IRDA) announcing free pricing of all general insurance products beginning in 2008. ?With large number of players entering the motor insurance segment, the recent announcement by IRDA will see most of the players bringing down the insurance premium by 5% to 10% on motor own damage (insurance cover over the vehicle) depending on the risk attached to a particular vehicle,? an official at National Insurance Company Ltd (NIC) said.
?Initially, lower prices will help customers save on premium and eventually the players will come up with more products like different rates of depreciation or different add-on services which will make the entire process of choosing insurance companies all the more complicated for buyers,? Pavanjit Singh Dhingra, an insurance broker, said. ?However, the price correction is not sustainable as prior to January 2007, average loss ratio was between 60% and 62% andnow the margins will squeeze further,? he added.
