In the recent April 1 renewal, when most of the Rs 80,000-crore general insurance business get renewed, the general insurers have mostly failed to receive a better pricing due to heavy competition among themselves.

In a bid to control the situation, IRDAI had recently introduced the concept of burning cost (loss figure) which has to be taken into account while pricing the fire and property product. But it has not worked out, general insurers said.

"Though the regulatory initiative is to be lauded, we find that majority of the mid to large corporate renewals remained at expiring levels of premiums, giving us the impression that market is yet to adopt the methodology wholeheartedly," SBI General managing director Bhaskar J Sarma told media.
Iffco-Tokio managing director and chief executive Yogesh Lohiya also confirmed that though IRDAI's act of introducing concept of risk pricing based on burning cost to be appreciated for, the result has to be seen.

"It may take some more time for market to stabilise and implement burning cost based pricing in true sense," ICICI Lombard chief, underwriting and claims, Sanjay Datta said adding that as the burning cost norm was implemented by IRDAI in February only, it would take some more time for them to understand its impact.
However, New India Assurance chairman and managing director G Srinivasan said, "There is slight improvement in price under property and fire segment as we have used the burning cost method in the segment which has been devised by IRDAI."
Prices are stable across other segments. However, prices have gone up by around 14 percent under motor third party segment.
Reliance General CEO Rakesh Jain said that pricing has remained competitive in the industry. "Pricing has gone up by 10-15 percent in those segments where we had bad claim experiences and some of which may include textile, plastic and chemicals," Jain said.
Premiums have gone up in few segments like health insurance largely due to health cost escalations and deteriorating claim ratios.
"In the group health segment (corporate), the premium has gone up by 15 percent whereas in retail health segment, it has gone up by almost 35 percent across industry.
In motor segment, third party rates have recently gone up ranging from 10-30 percent depending upon the models of vehicles," Lohiya said.

Latest News  from Business News Desk