Third party motor insurance premium rates are expected to increase in India

International Desk: | Published: 2021-05-08 04:15:10


India's non-life insurance sector is expecting an increase in third-party motor insurance premium rates in the new financial year (2021-2022). In the last financial year (2020-2021), the premium rate of this insurance remained unchanged.

The Insurance Regulatory and Development Authority (IRDA) announces insurance premium rates every year, according to local media reports in the country. Authorities did not increase insurance premium rates last year due to the Corona epidemic.

According to non-life insurance companies, the premium rate needs to be revised to keep the business sustainable.

Care Rating said in a recent report that in addition to the expected growth in the health insurance sector in the 2021-22 financial year, any increase in the premium rate of the third-party motor insurance sector is also required. It can add energy to non-life premiums.

Subramaniam Brahmajyasula, head of product development at SBI General Insurance, said the regulatory body always has to take a fine balance in revising motor third-party premiums. Because they have to keep in mind the interests of both the customer and the insurer.

He said the practice is likely to become more complicated this year as there was no increase in third-party premiums in the previous financial year.

On the other hand, due to the lockdown caused by the epidemic, most companies have improved their claims experience in motor insurance, especially in the first half of 2020-21, with very few claims.

The Covid-19 epidemic and lockdown reduced motor insurance claims in the early months. However, since then, the insurance companies have started returning to normal.

In the fiscal year 2021, motor third-party insurance premiums rose 4.4 percent to ৬ 106.5 billion, or 1.4 billion. Earlier, the premium for the fiscal year 2020 was Rs 101.96 billion.

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