The Hindu Business Line : Premiums data: IRDA to change reporting format

THE Insurance Regulatory and Development Authority (IRDA) is to soon change the way in which companies' premium is publicly reported to present a more accurate picture of the market.

The IRDA journal plans to add details to its presentation of premium statistics to account for the different strategies followed by insurers. The change is expected to neutralise misleading conclusions that may arise from the current format.

Mr T.K. Banerjee, Member (Life), IRDA, said "We are trying to bring this (change) by the year end. The aim is to make it comprehensive and concise." He added the changes should depict the correct situation.

IRDA journal currently reports new business premium of companies every month. This is taken as a proxy for market share.

According to MetLife's Managing Director, Mr Venkatesh S. Mysore, the current presentation is restricted to premium collected only through new business and the attendant policies issued.

This is tilted in favour of companies that derive a significant premium from unit-linked plans. Premiums here are higher than average, as it is an investment-oriented plan, as against traditional plans where the insurance dimension is critical.

The planned change would see the inclusion of sum assured on the new business. This would give a clearer picture of the nature of business life insurance companies focus on — companies concentrating on traditional business would generate lower premium, but higher sum assured.

Mr Banerjee said that the IRDA's internal committee would also consider the possibility of including renewal premium at a later stage.

While unit-linked plans are the current favourite among individuals, reporting in group insurance may also be modified. Mr Mysore said that the segment of group business that comes from superannuation policies could be reported separately.

He said this category of group business was more in the nature of "funds business''. To facilitate a clearer picture, it needed to be separated from other kinds of group insurance business.

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