Motor, health insurance premiums likely to go up

The Insurance Regulatory and Development Authority of India (IRDA) is finalising revised rates of premium for general insurance companies, which is likely to allow for an increase in premiums for motor and health insurance covers.

General insurance companies dealing in motor and health insurance may be allowed to raise premium rates in order to fully cover the risk of losses, IRDA chairman J Harinarayanan said today.

Speaking to reporters on the sidelines of a FICCI National Conference on Insurance, Harinarayan said the IRDA is in the process of finalising the premium rates for motor insurance, so as to insulate insurers from losses.

He said general insurance companies have reported a combined loss of about Rs3,500 crore in the current fiscal on account of motor insurance claims.

With insurance companies continuing to set aside more funds to settle claims, Harinarayan said the premium rates will, however, be raised gradually in order to avoid a sudden spike in rates.

"I think the demand and supply position in the non-life industry will be such that prices should harden and I expect to see evidence of that in the course of next few years. And I would like to make it even harder as we go along," Harinarayan said.