The insurance regulator Irda is finally getting ready to to raise the premium for the third-party motor business despite stiff opposition from transporter unions.
Though it has not been announced as yet, Irda may go for hike of 80% in the segment.
Irda and general insurers have met the transporter unions in Hyderabad on Tuesday to negotiate for the rate hike in the loss-making third-party motor portfolio. Confirming the development J Harinarayan, chairman, Irda said, ?We met the transporters unions on Tuesday. This marks the conclusion of our interaction with all the stakeholders. The transporters will always say there is no need of increasing the premium. But, non-life insurers are incurring heavy losses …I can’t tell you the time-frame, but I can only tell you that we will try to do it as soon as it is possible.”
Irda wanted to to protect the solvency margins of the non-life insurers by hiking the premium in the segment, said Harinarayan. A senior official of Irda said that Harinarayan would discuss the issue with other Irda officials to take a final call. ?Irda will be taking into account the loss ratio to reach on the premium price. However, the non-life insurers are demanding a hike to the extent of 80% in the third-party motor premium as they were incurring losses to the tune of R3,000-4,000 crore on the front every year.
M Ramadoss, CMD, New India Assurance, said the industry was already incurring losses upto 180-85% in third-party motor segment. ?We have demanded for an increase to the tune of 80-85% in premium to protect our solvency margins. ?I expectthird party motor premium should also be detariffed in a course of time after gradually increasing its premium prices,” he said.
