In the last few years, profits of the general insurance companies were hit by three major natural catastrophes – floods in Tamil Nadu and Jammu & Kashmir floods and cyclone Hud-Hud. To ensure that natural calamities do not adversely impact the insurance companies, the regulator feels the need for some price correction for general insurance companies.
Speaking on the sidelines of the 18th Global Conference of Actuaries (GCA) TS Vijayan, chairman of the Insurance Regulatory and Development Authority of India (Irdai), said, “General insurance is not making a lot of money. I think some price correction will be required when there is a disaster, especially in a concentrated area.” The Indian insurance industry received claims worth over R10,000-12,000 crore following various catastrophes in the last three years. Insurers have already received claims of around R4,800 crore after the recent floods in Tamil Nadu.
Irdai chairman also reposed his faith in the insurance industry to grow at a faster pace than being experienced currently. “The Asian markets have recorded a real growth of 6.5%, emerging markets grew at 7.4%, and advanced countries grew by 2.9%, while India could only grow at 1.8% in 2014-15. In this year, we should be able to make up for the growth and industry need to identify which are the things relevant for capturing customer’s mind and wallet share,” said Vijayan.
Vijayan said actuaries have great responsibility to ensure that we remain trusties of customers through the changes in technology, products as well as regulations. “We have to get a better deal for the customers. The industry has seen close to R25 lakh crores invested by customers. This is due to the trust and commitment reposed by customers in the industry. Trust is not a one-time affair; it has to be renewed every time,” concluded Vijayan.