India Inc insurance renewals see huge discounts again

Contrary to expectations, India Inc has once again been overloaded with high discounts by the 23 domestic general insurers who have renewed their majority of business on the first day of the fiscal.

Almost majority of Rs 30,000 crore general insurance business get renewed on April 1. Though the general insurers? act of providing hefty discounts to the corporate, since the price controls were removed from premium pricing two years back was not new, it was expected that the trend would change from this year, as the general insurance industry had witnessed too much unhealthy competition affecting their bottomlines.

While the private sector general insurance companies have offered larger discounts than the last year (estimated to be over 90-95%) in certain accounts, the public sector general insurers have given slightly lower discounts to retain or to corner more accounts in fire and property segments.

Speaking to FE S Somasekhar, president Reliance General Insurance said ?The discounts offered to corporate have remained very high. In some cases companies who have good track record from the risk management and claims point of view have been given much larger discounts than last year.”

Confirming the same S. S Gopalarathnam , MD & CEO , Cholamandalam MS general insurance said that the competition to corner accounts during the days slow down among the general insurers have remained very intense. ?The discount level has remained at the same level like last year or has gone up,” he said.

Gaurav Garg, CEO and MD ,Tata AIG General Insurance said his company has offered discounts and managed to perform well on the renewal day.

However the state owned general insurers have reduced their discounts on the day of renewal.

M Ramadoss, CMD, New India Assurance said that ?We have offered within 80-85%. We have preferred a risk based approach while quoting our pricing,” he said. However he said the competition for state owned general insurers is emerging from the new kid in the block? SBI General Insurance?set up by the country’s largest bank State Bank of India. G Srinivasan , CMD , United Insurance said his company had offered discounts up to 50-80% while providing covers to the corporates.

Analysts have said with reinsurance rates remaining soft in the international markets, Indian general insurers have availed better pricing while reinsuring their portfolios and have also kept their rates low for the domestic customers.