The Hindu Business Line : Fire insurance premia to dip

Mr M. Ramadoss, Chairman and Managing Director, Oriental Insurance Company, said that the insurer was among the few insurers to have already filed its new rates under the free price regime, expected to be effective from January, 2008.

Fire, engineering and motor insurance have been following pre-administered rates or tariff. Since January, insurers have been allowed to cut rates - subject to a floor of 51.6 per cent.

According to Mr Ramadoss, discounts will now be further stretched from 51.6 per cent to around 60-65 per cent. “It should not go beyond that,” he cautioned.

Flat growth

The fall in fire insurance premium has meant that the company has registered almost a flat growth in gross written premium. “We have grown by just 1 per cent in terms of premium, but we hope to end the fiscal at 5 per cent,” Mr Ramadoss said.

The company’s focus will be on strengthening its bottomline, he added

The rise in health insurance premium under its new products has led to a slowing down of growth in these policies. The Chairman said that health insurance premium, which had been growing at 40 per cent last year, had now slowed down to 18 per cent.

Mr Ramadoss said the company refused Rs 70 crore worth of group mediclaim policies which were up for renewal this year.

“These policies were loss-making, but the accounts have obviously been picked up by other insurance companies,” he said

Oriental Insurance Company will soon launch a special health insurance product for senior citizens. The product has been filed with the IRDA.

The policy will offer a sum-assured of Rs 2 lakh and will involve co-payment of around 5 per cent.

National Insurance Company and New India Assurance also have policies for senior citizens. According to Mr Ramadoss, the company’s product will cover more diseases than National Insurance’s.