Business Daily from THE HINDU group of publications
Friday, Jan 05, 2007
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Business Daily from THE HINDU group of publications Friday, Jan 05, 2007 ePaper |
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General Insurance Money & Banking - Trends Marketing - Strategy It's now raining discounts Radhika Menon
According to Mr M Ramadoss, Chairman, Oriental Insurance Company, motor insurance policy holders could receive a maximum discount of 20 per cent and fleet owners can secure an additional 10 per cent as per the approved rate structure.
Mumbai , Jan. 4 It's now raining discounts with the free price regime kicking in from January 1. For fire insurance policies, the discounts can be as much as 40 per cent while motor insurance policies covering own damage will benefit from a 20 per cent discount. An additional 10 per cent discount is in store if you are a fleet owner and possess at least 10 cars. While the new rate structures filed by public sector insurance companies such as New India Assurance and Oriental Insurance Company have been approved by the Insurance Regulatory and Development Authority, some of the private insurers are yet to receive approval. For now, customers can avail themselves of large discounts only from the public sector insurance companies. According to sources, New India Assurance, the largest non-life insurer, can offer a whopping discount of as much as 40 per cent on fire insurance policies, if the property to be insured is considered low risk. The company will offer a maximum cut in premium of 17 per cent on own damage motor insurance policies of private cars, 14-15 per cent on two wheelers and up to 20 per cent on commercial vehicles. The premium would depend on the age of the vehicle and those that are less than five years old will receive the maximum discount. So, on a car that has been just bought at Rs 4 lakh, the premium, which would have been Rs 12,000 (as per tariff the premium was around 3 per cent of the value of the car excluding depreciation), will now stand reduced to Rs 9,960. New India will also offer an additional discount of 10 per cent for fleet owners, provided the claims ratio in the past one year has been less than 50 per cent. Mr M Ramadoss, Chairman, Oriental Insurance Company, said that motor insurance policy holders could receive a maximum discount of 20 per cent and fleet owners can secure an additional 10 per cent as per the approved rate structure. Discounts on fire insurance policies can go up to 35 per cent, he added. If the rates structure of an insurer has not been approved, then a ceiling of 10 per cent discount will prevail on motor insurance policies and 20 per cent on fire insurance policies. Insurance company officials say that while public sector insurance companies have the muscle power of strong balance sheets to extend large discounts, private insurers may not be able to do the same. Since there are now stringent requirements for underwriting risks based on parameters such as the age, model and location of the vehicle, documentation will increase. "We have to undertake responsible underwriting and will seek various details such as PAN number, no-claim bonus documents, previous policy numbers to extend maximum discount," said an insurance company official.
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