The Hindu Business Line : `General insurers buoyant despite free pricing regime'

Hyderabad May 17 De-tariffing has taken off well with the non-life insurance industry and even the re-insurers taking it in a positive light, according to Mr C.S. Rao, Chairman, Insurance Regulatory and Development Authority (IRDA).

"Business growth in the last fiscal was quite impressive including the last quarter which saw the implementation of de-tariffing," Mr Rao told Business Line here.

The general insurance industry grew by 22.5 per cent to Rs 25,000 crore from Rs 21,000 crore in the previous year. "Even in a de-regulated tariff regime, the general insurance services are buoyant," the IRDA Chairman said.

Mr Rao said the tariff was earlier affecting fire and engineering insurance.

Re-insurers happy

"This segment had done well at Rs 4,500 crore with over 20 per cent growth compared to 2005-06," he said adding that the re-insurers were also happy with the business growth and all insurance companies are currently in talks with their re-insurers for firming up commitments for the current fiscal. Further, due to the de-tariffing regime, the public sector players could play more aggressive marketing strategies, he added.

With regard to the industry's performance this year, Mr Rao named motor and health insurance as potential sectors. "The industry focus will now shift to motor and health," he said.

Health insurance

Observing that there was a tremendous demand for health insurance, he said firms might line up a wider range of products to suit semi-urban and rural areas. "In addition, there would be a shift from the current corporate business to the retail business. Individual customers would be chased in a rigorous manner," he observed.

Similarly, the formation of a motor pool would act as a growth driver for motor insurance by addressing the concerns on third party risks. A level-playing field was being created in the segment between public and private players.

The generally buoyant industry, coupled with decreased solvency pressures on the public sector players and increasing presence of private players, would drive growth in motor sector, he felt.