Irda urged to deregulate motor insurance tariff

Briefing reporters, The New India Assurance Company Chairman & Managing Director M Ramadoss said general insurers have been asking Irda to allow for actuary driven priced regime and do away with subsidised regime so that the insurers may not have to take huge losses.

Pointing out that no insurer should be made to run at a loss, he said they have been impressing upon the need to increase the premium on the motor insurance.

Currently, he said, their solvency margins are coming down as a result forcing them to undertake loss-making business.  In this regard, he said, Irda has been holding talks with the various commercial vehicles association and hopefully something fruitful favouring the insurers demand would be worked out in due course. He said currently motor insurance business was severely bleeding the sector with the player having to incur heavy losses annually. “There has been no revision in compensation since 2007,” he added. The New India Assurance Company alone was taking a hit of Rs 2,200 crore as a result, he said.

Meanwhile, he said, in an effort to beef up their operations and service delivery for customers, the company is currently implementing a robust IT delivery platform called — CWISS — Centralised Web-based Insurance System Solution. The Rs 175 crore IT platform project, he added, is being implemented by TCS.  

The company, which saw a domestic premium turnover of Rs 6,000 crore for fiscal ended March 31, 2010 also logged a Rs 1,175 crore premium sales from overseas, the business, primarily coming from UK, Japan, and the Middle East.

Further, the company, which has formed specialised verticals for banks, automobile dealers and brokers to provide better service, Ramadoss said is also setting up claims hubs across the country to provided for settlement of claims in fixed timelines. Currently, it has put in place 15 such hubs and hope to beef up the same so that it could settle the claims from Tier-I and Tier-II cities also at the metro hubs itself. From 70 days settlement time, he said, they has reduced it to 25 days and hope to bring it down further to 20 days. The company has been clocking 9.5 per cent growth business, he added, while industry as a whole was logging around 16 per cent growth. While PSU players enjoy 59 per cent of the market share, the rest is accounted by over private players, while company, on its own enjoys a 19 per cent market share.