Third Party Motor Insurance Is Extremely Unprofitable For General Insurers’

MD and CEO of IFFCO TOKIO General Insurance, S Narayanan feels that unless the premium rates in general insurance space are consistent with claims cost plus expenses the profitability will be elusive. In conversation with Ritu Kant Ojha of The Indian Express, Narayanan says that because of the extreme unprofitable nature due to inadequate premium levels, most companies are critical of Third Party insurance especially in case of commercial vehicles. “This is one area where premium rates are controlled by the regulations. This should be made free and companies should be able to charge their own premium rates after filing with IRDA” he says. Excerpts:

With the competition increasing in the General Insurance space are we going to see lower premiums and better services?

Premium in most classes of insurance has reached a plateau and there is every likelihood of rates firming up. In terms of products, we are likely to.