A rising loss ratio in the government's pro-poor scheme such as the Pradhan Mantri Suraksha Bima Yojana (PMSBY) has forced general insurers to urge the government to hike the premium for the schemes.
A rising loss ratio in the government’s pro-poor scheme such as the Pradhan Mantri Suraksha Bima Yojana (PMSBY) has forced general insurers to urge the government to hike the premium for the schemes. Currently premium charged is just Rs 12 per year and insurers have asked a hike of one-two rupee per year, said senior officials in the insurance industry.
According to senior officials in the insurance industry, loss ratio in PMSBY has touched around 250%. Under the scheme, risk coverage available will be R2 lakh for accidental death and permanent total disability and R1 lakh for permanent partial disability, for a one-year period between June 1 and May 31. PMSBY, launched by the government in 2015, is available to people in the age group of 18 to 70 years.
G Srinivasan, chairman and managing director of The New India Assurance, said: “Though exact numbers are still not available, but we believe that loss ratio in PMSBY is around 250%. We have verbally told government to revise the price when new policies will be launched from June this year.” However, the final decision will be taken by the government whether premium rates will be increased this year or next year, said the industry participants.
Currently, around 12 non-life insurance are selling the policies of PMSBY, with four state-owned general insurers having market share of nearly 75%. According to the data from Jansuraksha website, as on 20 February, 2017 around 9.9 crore people have been enrolled and insurers have received claims from 11,734. The data also shows that, general insurers have disbursed claims of 8,659 persons as on February 20.
Sanath Kumar, chairman and managing director of National Insurance Company, added that being the market leader in the segment they have also demanding revision in premium pricing in PMSBY due to the rising loss ratio. Out of 9.9 crore persons insured in PMBSY, around 3.7 crore persons are covered by National Insurance.
Along with PMSBY, the government had also launched Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which offers a renewable one year life cover of R2lakh to all savings bank account holders in the age group of 18-50 years, covering death due to any reason, for a premium of R330 per annum per subscriber. Officials also say general insurers are also likely to ask the government to consider this scheme for longer duration similar to long-term two-wheeler policy.