Motor and health insurance is likely to cost more from January 1, with the decontrolling of tariffs in non-life insurance. The industry, which is geared to meet the January one deadline for decontrolled tariffs, however, felt the overall premium in the sector is likely to come down as detariffing would inject competition.
“The Industry is fully geared for the detariff market and as in any service industry, due to competition the prices come down. Although there would be adjustments in some segments,” General Insurance Council Secretary General, K N Bhandari told PTI here.
In the detariffed regime, the overall premium would come down with adjustment in segments like Motor, Health with the cross-subsdisation being stopped, he added.
Even the current rates allowed by IRDA are not suffcient. There has been a upward adjustment, but still below required rate, he said, adding they have asked regulator IRDA to reconsider it.
The Insurance players have also to be very careful that their margins do not shrink beyond a point as prices will come down and will have to struggle hard to see that they do not get into losses, he added.
Third party insurance players are already bleeding and the losses would be significant post-January.
The pool created by all insurance players is a devise to ensure that there is a level playing field among Insurance companies and would contribute towards it depending on the GDP and market share of a particular company, said Bhandari.
All the underwritten third party Insurance premium would be passed on to the pool.