General insurers plan minimum lowest premium level to cut loss

Taking a cue from their peers from the banking sector and to arrest the ever-increasing underwriting losses due to de-tariffication, general insurers are planning introduce a 'base rate' kind of system while pricing the premium rates.
The industry body, General Insurance Council, discussed the idea at a meeting held here on July 22. It was attended by the heads of New India Assurance, GIC Re, ICICI Lombard, HDFC Ergo and Tata AIG General Insurance among others.
"Generally, there is a feeling that premium rates in the domestic market are on a lower side. Insurers have been discussing for quite sometime how to ensure that the rates are at right level and there is some semblance of uniformity.

"At the July 22 meeting, we had discussed how to bring the rates at the right level across the sectors including health, motor and fire & engineering," New India Assurance chairman and managing director G Srinivasan told PTI.
The idea is to sensitise insurers and ensure that the premium rates are in line with the risks involved, he said, adding that the meeting also discussed how the underwriters could ensure the correct premium rate.
"The Insurance Information Bureau is already trying to do it in the fire segment. On the similar lines, we want to have some kind of technical rates in the industry, falling on the lines of base rate in the banking industry, which we could consider while fixing up the rates," he added.