Motor insurers insist to increase premium rates for third party motor segment; seek the move as an opportunity to reverse the losses due to the segment.
New India Assurance Co Ltd, a leading name in motor insurance, is expecting to hear from IRDA regarding latter's final verdict on incrementing the cost of third-party motor insurance in order to restrain the soaring losses caused to the business.
Attaining break even is the aim of New India Assurance which is why they are insisting on hiking the premium rates for motor insurance.
Third Party Insurance, as the name suggests, necessarily covers for all the losses suffered by the third party, but the insured vehicle itself doesn't get any protection from the insurance. Such kind of insurance is pronounced among goods transporting companies and with two-wheeler owners, because it is quite economical as compared to comprehensive insurance.
According to the regulator, an increment in the range of 25-137 per cent is good enough to achieve break-even in this segment. New India Assurance backs up IRDA by recommending raise of atleast 50 per cent, again to realize break even.
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Goods-carrying vehicles and the commercial vehicle industry experienced downfall in the past two years. Because of which, the industry reported losses amounting to thousands of crores. Company's exact share in the third party business has been about 10 per cent.
Regarding the third party motor insurance segment, the company (New India Assurance) is keen on recovering their losses due to it.
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