Indian general insurance companies, which have been posting underwriting losses for the past several years, want the industry regulator to give them a better room to grow.
The general insurers want Insurance Regulatory and Development Authority (IRDA) to allow for at least 175 per cent hike in the third party insurance premium of commercial vehicles and better regulation of health service providers to cut on losses in health insurance.
“We have been urging IRDA to revise the third party insurance premium rates for commercial vehicles, since at present the premium rates are fixed and the liability is unlimited,” Oriental Insurance Company CMD M Ramadoss said addressing a national conference on insurance organised at the Jaipuria Institute of Management here.
Commenting on the heath of general insurance industry, he said the industry size at present was over Rs 31,000 crore, while the total underwriting losses were worth almost Rs 1,500 crore.
“Although, the companies have been making net profits, it is purely on basis of investments and not insurance activities,” he said adding all general insurers were posting underwriting losses, save one private insurer, which was making marginal underwriting profit.
There are about 18 general insurers functioning in the country, while 3-4 more players are likely to join the fray in the next fiscal.
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“The mounting losses in the general insurance sector are discouraging and are in fact eating away our investments,” Ramadoss lamented.
Besides, he also mentioned that the pricing of fire insurance was very important in present times, when the companies, due to intense competition, had slashed their premium rates for this segment by almost 80 per cent.
“It is the onerous task of the IRDA to ensure that the risk carrying capacity of the general insurance companies is rectified,” he added.
Ramadoss also mentioned the paucity of qualified people in the insurance sector and the lack of core computerisation of companies on the lines of Core Banking Solution (CBS) of banks, which was impeding their growth and penetration.