Companies change insurers to seal better deals

This year's corporate insurance cover renewals have thrown up many surprises. India Inc has seen its premiums drop by 60-75 per cent from last year.

Insurance Regulatory Development Authority has offered full pricing freedom to insurance companies from January this year and there is a scramble among insurance companies to grow their topline and bag large corporate policies.

The discounts offered to corporates in certain policies have been 80-90 per cent. Around 30 per cent of the corporate policies are renewed on 1 April. These are direct risks where the sum insured is less than Rs 2500 crore at one location.

The four public sector insurers with large balance sheets, higher solvency margin and high retention capacity outperformed the private insurers in grabbing big corporate accounts. Small private insurers including Cholamandalam General Insurance and Iffco-Tokio General Insurance have also been aggressive bidders after losing several corporate accounts last year.

According to insurance brokers, the large private players such as ICICI Lombard and Bajaj Allianz have been selective in offering huge discounts. HDFC General Insurance, which inducted Ergo as its new joint venture partner, has adopted a wait-and-watch policy as it is still framing its underwriting strategy.

In contrast, Future Generali India Insurance, a new entrant, grabbed huge accounts from the larger players.

ICICI Lombard has lost some big accounts. It lost the group health insurance policy of Accenture to another insurer after giving negative returns. Similarly, GAIL (India) has moved from Oriental Insurance to New India Assurance.

In the private sector, Iffco-Tokio has bagged the account of FMCG major Unilever's account, which was earlier with a consortium of insurers.

Similarly, Gujrat Electricity Board policy which is an industrial all-risk policy covering six power plants has seen a decline in its premium by more than 85 per cent. According to sources, Cholamandalam has bagged the account by quoting the lowest premium of Rs 2.91 crore.