Non-life insurers mull life after detariffing

Chennai: With the removal of administered pricing mechanism / detariffing in respect of fire and engineering insurance policies, personal lines of insurance like health insurance re expected to log strong growth.General Insurance- Life after Detariffing organised by Chennai business magazine Industrial Economist, on 8 June, 2007, Insurance Regulatory and Development Authority (IRDA) chairman C S Rao said, even before detariffing the health insurance business portfolio has moved a rank to third after motor and fire. Prior to the opening up of the sector, health insurance had lagged behind motor, fire and engineering insurance.

According to Rao, all these years Indian non-life insurers did not find the necessity to look at personal lines of business in a serious manner as the corporate sector had been yielding handsome premium. But with the freeing of tariff rates, insurers have to look at other segments for growth, he added.

Agreeing with him, K N Bhandari, secretary general, General Insurance Council, said, hereafter the insurers would adopt the right management practices to accelerate growth. "The objective of detariffing is to minimise cross-subsidisation and end the level of distortion at the market place."

Presenting the theme of the seminar, S V Mony, former chairman, General Insurance Corporation of India, and the secretary general, Life Insurance Council, cautioned policyholders that getting a low premium quotation while selecting their insurers need not imply a higher claims paying ability.

He said the time had come to differentiate between the men from the boys and promoters of non-life companies had to get their act together with more disciplined risk underwriting. He also called upon the industry to give its suggestions to the Standing Committee of Parliament that is going into the amendments proposed to the existing Motor Vehicles Act. He said the suggestions should not be driven by bottomline perspective alone. The industry''s suggestions should keep in mind the welfare of the public.

Earlier S Viswanathan, editor, Industrial Economist, welcomed the gathering.