The Hindu Business Line : `Consumers expect lower insurance premiums'

As the general insurance market gears itself up to the new free-pricing regime that took effect from January 1, consumers, in a nation-wide survey conducted by the industry chamber FICCI, expect premium rates to nosedive.

Almost 80 per cent of the respondents give the market two-three years to stabilise, while 92 per cent prefer to deal with insurance companies directly and 60 per cent wish to consult companies for expert advice on the subject rather than insurance brokers.

A special discount is currently given by insurance companies to brokers on the business they procure.

However, 52 per cent respondents were in favour of discontinuation of the special discount, as they prefer to deal directly with the insurance company because they feel that brokers as intermediaries are still not wholly acceptable for corporate or individual clients in India.

Detariffication

The country currently has 16 players in life insurance and 15 in the general insurance sector.

To a question on whether there was need for more competition among the insurers, 88 per cent answered in the negative. They felt that the number of insurers were adequate.

There was a difference in how detariffication was understood by the respondents. While 60 per cent felt detariffication related to `change in insurance costs', 44 per cent said it meant `change in scope of cover'.

`Regulatory control coming down' was associated with detariffication by 40 per cent of the respondents. Seventy-nine per cent of respondents felt that insurance companies should be allowed to change terms and conditions post-free pricing.

Choosing insurer

Another 72 per cent stated that the choice of an insurer would depend on a combination of factors such as pricing, level of coverage, service levels, risk management techniques and ability of insurance companies to understand the need of the consumers.

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