Motor insurance: New India waiting for IRDA decision

India Infoline News Service | Mumbai |

IRDA had released an exposure draft in which it proposed for an increase in premium for third-party motor cover for 2014-15

In order to control increasing losses from motor insurance segment, New India Assurance is waiting for the final approval from IRDA (Insurance Regulator Development Authority).
Earlier this year, IRDA released an exposure draft in which it proposed for an increase in premium for third-party motor cover for 2014-15. Motor insurance in India has two components: own damage cover and third-party cover. The latter is compulsory, to cover third-party damage in terms of property or life.
According to the draft, IRDA is looking for a hike of 25%-137% rise to attain breakeven in this segment. Motor insurance is mandatory for all vehicles plying on roads. All stakeholders had to give their views by February 28, 2014 following which the IRDA will bring out the final guidelines.
New India Assurance has also suggested that there has to be a 50% rise to attain break-even in this segment.
The company's total exposure in the third-party segment was about 10% including commercial vehicle industry.
 

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