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Tuesday, Nov 30, 2021
Outlook.com
insurance

A Life Beyond LIC

The market is opening up but is the Indian mind ready for general insurance? Private insurers are weighing their risks...

A Life Beyond LIC
Collage by Anil Ahuja
A Life Beyond LIC
outlookindia.com
-0001-11-30T00:00:00+05:53

To complement the existing four public sector general insurers—New India Assurance, Oriental Insurance, United Insurance and National Insurance—five private companies, namely Iffco Tokio, Tata aig, Reliance, Bajaj Allianz and Royal Sundaram Alliance, had entered the fray. They would together cover the entire spectrum of general insurance ranging from fire, engineering, marine cargo, marine hull and aviation and miscellaneous products like medical, personal accidents, householder and shopkeeper insurance. Rates were expected to fall as competition rose. But on September 30, the Tariff Advisory Committee (TAC) asked the general insurers to impose a surcharge of 10 per cent on all premia collected under the fire and engineering tariff business—half the general insurance business. This surcharge applies to not just new and renewed policies but also to existing ones on a pro-rata basis for the days left for the policy to mature.

Motor insurance, a third of the total business, is another loss-making area. The tac is looking at it for revision of rates. This follows a suggestion in late August to push non-life premia up by 12.5 per cent when the proposed Insurance (Amendment) Bill was opened in Parliament. Further hikes are possible. Aviation insurance has gone up from Rs 100 per passenger per trip on an aircraft to Rs 250. Three weeks ago, Indian Airlines increased its fares by Rs 100 to pass on some of the cost.

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