3rd Party Motor Insurance Faces the Loss
Posted on February 6th 2008If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
The companies that offer 3rd party insurance cover claim that they are facing a big loss. During the General Insurance Council meeting, private sector members were unhappy due to the state of 3rd party motor insurance pool.
According to the pool, premium collection must be around Rs 2,700 crore by March-end. But a current estimate shows that losses are expected to be around 150 per cent.
We need to examine whether this system is actually going to work for the insurance industry and customers in the long run.
- Industry source said.
The private sector general insurers in particular are affected since taking on additional losses due to these administered rates is going to affect their bottom lines.
The public sector companies can bear the losses since they have deeper pockets. However, in a scenario where the companies are already grappling with a difficult market that has changed and is likely to be completely detariffed shortly, the bottom lines becomes a key concern.
- Another source said.
According to industry figures, the total insurance premium in 2006-07 was Rs 8,717 crore - approx. 49.30% of the total net general insurance premium of Rs 17,689 crore.
By editor in Auto Insurance