Industry demands higher third-party premiums to cover the losses. After raising the provisioning last year to 210%, the premiums should also be increased.
According to industry officials, the hike of 10-15% in third-party insurance by the regulator is insufficient as it doesn't cover the losses. KG Krishnamoorthy Rao, the chief executive of Future Generali India Insurance told PTI that this hike is not enough and therefore the claim ration will remain in the range of 140-150% despite the hike.
The regulator IRDA against a demand of 50% hike by the industry has raised the third-party premium by 10-15%.
To cover the mounting losses, the industry is constantly demanding for higher premiums as the third-party insurance premium is one of the loss making segments.
Insurers will approach the regulator for reconsideration and will also take up this issue with the General Insurance Council according to Tata AIG General Insurance chief executive K K Mishra. He also added that premium rates should be more after raising the provisioning from 145% to 210% last year.
Sanjay Datta, the chief (Underwriting and Claims) of ICICI Lombard General Insurance said that private car and two-wheeler customers will have limited impact of the hike in third-party premium as it constitutes a small component of the total premium. He further added that it's a prudent attempt for maintaining the balance between the need to increase rates given the hike in claims and impact on customers.
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