Motor Insurance « Archives of Policy Mantra Blog

Tag Archives: Motor Insurance

PIL Seeks Compulsory Insurance Of Vehicles

Posted on May 3, 2013 by Akanksha

A Public Interest Litigation (PIL) has been filed in the Gujarat High Court seeking directions to the state authorities to make it compulsory for all vehicle owners to obtain insurance cover and to evolve a system for regular renewal of vehicle’s insurance policy.

On basis of this PIL, the bench of Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala asked government pleader Prakash Jani to take instructions from the state government in this regard by saying; this seems a very serious issue and needs to be addressed.

The PIL has been filed by advocate Tushar Sheth and he contended that casual attitude of citizens in not renewing insurance policies or in not taking insurance of their vehicles leads to great loss and suffering for them in the event of accident, as they fail to secure compensation. Families of victims are left in lurch.

Demanding compulsory insurance policy for all vehicles, advocate Tushar Sheth submitted that the section 146 of the motor vehicles act says that no person can ply the vehicles without valid insurance. He also submitted that there is penal provision for failing this.

The PIL further stated that while authorities like RTO collect vehicle tax for lifetime, they should be asked to place a system for collection of insurance premiums for lifetime in case of motor vehicles.

The PIL has demanded appointment of a monitoring agency to ensure that vehicle owners regularly renew insurance policy. And if owners fail to do so, strictest action should be taken against the defaulters.

United India Insurance Net Profit Up 36% In FY’13

Posted on April 30, 2013 by Akanksha

No Comments

United India Insurance has posted a 36% rise in its net profit at Rs 527 crores in 2012-13 as against Rs 387 crores in 2011-12.

Gross premium income grew to Rs 9,266 crores in FY’13, compared with Rs 8,179 crores in the previous year, posting a growth of 13.29% with an accretion of Rs 1,087 crores.
Net premium income grew by 10.47% at Rs 7,489 crores as against Rs 6,780 crores.
Net earned premium income grew by 12% at Rs 7,251 crores, compared with Rs 6,087 crores.
Claim ratio stood at 84.61% for FY’13 compared to 88.50% in FY’12, an improvement of 3.89% due to better underwriting practices and claim control measures.
The investment income up from Rs 1,600 crores in FY’12 to Rs 1,777.41 crores in FY’13
Dividend of 70% is proposed for the year.
The net worth grew to 9% at Rs 4,952 crores as on 31 March 2013.
The company is targeting a premium income of Rs 11,000 crores for the current financial year.
Company has made a provisioning of Rs 431 crores towards pension and gratuity liabilities.

The company said that proposed formation of a Third Party Administrator (TPA) for PSU general insurers will help the company to improve the claims processes gradually. At present, the company is working with 12 TPAs and it will continue to use them.

The company is also in the process of appointing a consultant to chart the strategy for bringing out transformation and growth in it’s across verticals.

Despite growth in premium income and profit, the company reported a marginal fall in its market share. Company’s market share fell to 13.46% in FY’13 from 14.93% in FY’12.

Categories: News | Tags: Car Insurance, Claims Ratio, Gross Premium, Motor Insurance, Net Earned Premium, PSU General Insurers, Third Party Administrator, TPA, Underwriting, United India Insurance

HDFC Ergo To Focus On Motor, Health Segments

Posted on March 26, 2013 by Akanksha

No Comments

Private insurer, HDFC Ergo General Insurance is planning to increase its focus on health and motor insurance segments to sustain its high growth, apart from weather segment.

The company’s premium collection stood at Rs 1,998.16 crores during April-December 2012, a growth of 34.51% over the corresponding period last year while the general insurance industry is estimated to be growing at around 19% this year.

However, the company said that it would be challenging for it to sustain such a high growth, given the high base. But it is confident that it will grow better then the industry in the next fiscal.

The company will focus largely on the retail side of the business to grow in the future.

On the corporate business front, the company is seeing opportunities in marine segment.

HDFC Ergo General Insurance is a joint venture between HDFC and Ergo International, which is the primary insurance entity of the Munich Re group.

Categories: News | Tags: HDFC ERGO General Insurance, Health Insurance, Motor Insurance

National Insurance Likely To Be Listed By March 2015

Posted on March 15, 2013 by Akanksha

1 Comment

Public sector general insurer, National Insurance Company, might be listed by March 2015, following the finalization of norms for Initial Public Offering (IPO) by the Insurance Regulatory and Development Authority (IRDA).

The company has started evaluating the intricacies of these norms. Informally the centre has already forwarded the message to the company to be listed by March 2015.

Since the company is one of the biggest players in the market, the public-issue is likely to be of a substantial size.

National Insurance is one of the first public sector general insurers to have begun operations in India. As its operations have run for more than ten years, it is eligible to go public. The company was incorporated more than 100 years ago.

The company is aiming to garner premium of around Rs 9,500 crores this fiscal as against Rs 7,785 crores in 2011-12. Company’s focus areas will be motor and health insurance.

Categories: News | Tags: IPO, IRDA, Motor Insurance, National Insurance

Liberty Videocon General Eyeing Rs 120 Crores Premium Income in 2013

Posted on February 26, 2013 by Akanksha

1 Comment

Country’s 27^th general insurer, Liberty Videocon General Insurance has set a premium target of Rs 120 crores for 2013.

The company has launched its operations. It received license to operate in the general insurance industry from Insurance Regulatory and Development Authority (Irda) in May 2012.

Company is planning a portfolio with equal mix of retail (motor and health) and commercial (fire, engineering and group health) products.

The company has commenced business with an initial capital of Rs 350 crores.

Liberty Citystate will provide the Indian arm inputs on technical functions and extend expertise on managing emerging markets.

On the other hand, Videocon will provide access to extensive distribution network across India and share knowledge on consumer behavior.

The company intends to expand business by following ‘set-up, stabilize, study and expand’ model.

The company is planning to take up its number of branches to over 25 in 2014. The company will add five more branches soon.

At present, company has a team of 150 professionals and is planning to have about 320 employees by the end of the year.

Besides Mumbai, the company has operations in Delhi and Bangalore.

Liberty Videocon General Insurance is a 74:26 joint venture between Videocon industries and Liberty Citystate holdings Pte Ltd, a part of U.S.A. based Liberty Mutual Insurance Group.

Categories: News | Tags: Health Insurance, Liberty Videocon General Insurance, Motor Insurance, Premium

Insurers Can’t Reduce Compensation on Ground of Non-Possession of Driving License at the Time of Accident: HC

Posted on January 15, 2013 by Akanksha

No Comments

Non-possession of driving license at the fatal point of time is not fatal to claim of full insurance compensation from the insurance company, Madras High Court observed this while hearing the case of Krishnaveni and another vs. Manokaran and others.

Insurance company paid only half of the amount of Rs 6,48,000 assessed as dependency loss on the ground that there was contributory negligence on the part of the deceased, in that he was not in possession of driving license at the fatal point of time.

The HC dismissed this stand of the insurance company saying that non-possession of driving license can by no stretch of imagination be said to have contributed to the accident and the resulted death.

While traffic enforcement authorities can penalize a driver for non-possession of driving license, the insurer cannot, unless it can prove that the deceased did not have a valid driving license at all at the fatal point of time. In other words, if the driving license was left at the place of work or residence or anywhere else, such a lapse is not fatal to entertainment of full insurance compensation and the insurance company cannot wriggle out by adducing contributory negligence as the reason for halving the compensation amount.

Categories: News | Tags: Car Insurance, Motor Insurance

IRDA Brought Paint of Vehicle under Depreciable Part

Posted on January 10, 2013 by Akanksha

No Comments

Insurance Regulatory and Development Authority (IRDA) has included vehicle paint under the purview of depreciable part and fixed rate of depreciation for the same.

In case of painting, the depreciation rate of 50% will be applied only on the material cost of the total painting charges.

In case of a consolidated bill for the painting charges, the material component will be considered as 25% of painting charges for the purpose of applying the depreciation.

The changes have been brought in as it was observed that there was no uniform practice prevailing in the market for depreciation on painting.

The change will be applicable to all motor package policies whose risk inception date falls on or after first February 2013.

IRDA has asked all insurers writing motor insurance policies to make the proposed changes so that policyholders are made aware and there are minimal grievances.

At present, several companies don’t deduct the depreciation element from the painting charges, and painting related claims are fully reimbursed.

IRDA is of the view that paint is manufactured from polymer hence, it should be included in the group of plastic parts.

IRDA has fixed 50% rate of depreciation on vehicle older than ten years.

Categories: News | Tags: Car Insurance, Depreciation, IRDA, Motor Insurance

Up to 35% Cars Uninsured on Indian Roads

Posted on January 3, 2013 by Akanksha

No Comments

Almost a third of cars and more than two-thirds of two-wheelers on Indian roads do not have the mandatory third-party liability insurance, according to an analysis by insurance companies. And worse, many companies have found fake motor insurance policies in circulation.

Insurance companies have drawn these estimates going by the number of vehicles registered and the total number of policies issued. The analysis, which was not possible in the past, has been facilitated with the help of technology.

However, some insurers say that it is possible that number of uninsured vehicles on road may be lower than these estimates because many vehicles do not ply after 15 years. Hence, it is likely that 20-25% four-wheelers and 50% two-wheelers may be uninsured.

Uninsured vehicles are a problem in motor insurance. Nearly 70% of two-wheelers and 30-35% of four-wheelers are uninsured. It is clearly a challenge to the society as victims of accidents caused by these vehicles do not get adequate compensation.

In two-wheelers, the renewals of first-year policies are as low as 25%. Insurers say that although they send renewal notices, lower premiums on two-wheelers make it difficult to do a personalized follow-up.

Insurers say that one reason why such a large number of vehicles remain uninsured is the abundance of fake policies. Many non-life insurance companies have come across fake policies issued in their name.

With advancement in printing technology, it is possible for fraudsters to replicate policies of existing companies, helping them get through police checks. However, it is at the time of accident and claims from third parties that insurers detect the existence of fake policies.

Second reason for such a large number of vehicles remaining uninsured is that vehicle owners in small cities and villages do not face any scrutiny of their documents.

According to insurers, uninsured vehicles are one of the structural issues faced by non-life insurance industry in writing motor third-party insurance, which is a drag on the balance sheet of non-life insurance companies. The other issues are rigid prices and tendency of court awards to go up in keeping with inflation.

One solution that insurers have come up with is long-term policies. However, some insurers say that issuing long-term policies is a challenge because it is difficult to predict the movement of income and inflation over a long period. In some markets in Europe and U.S.A., insurers issue only six month policy. However, there is discussion on long-term insurance policies for some segments of vehicles.

In many cases, third-party proposals come to insurers after a break-in insurance. In such cases, the underwriting process needs to be a bit more stringent which is difficult to implement online.

Categories: News | Tags: Fake Poliies, Four-wheelers, Motor Insurance, Third Party Motor Insurance

Non-life Insurers Witnessed Fall of 26.5% in Policyholder Grievances

Posted on January 3, 2013 by Akanksha

No Comments

Non-life insurance companies have witnessed a fall of 26.5% in grievances by policyholders in financial year 2011-12 over the previous financial year.

22 non-life insurance companies received 93,155 complaints in FY’12 as against 126,658 in FY’11.

In FY’12, Out of 93,155 complaints, 58% or 53,929 complaints are policy related. In FY’11, out of 126,658 complaints 75,705 complaints were policy related.

A complaint is categorized as policy related when the policyholder has not received the policy document or the product does not match his expectation or the details mentioned in policy are not correct.

Around 70-75% cases under policy related complaints are registered by policyholders when they have not received the policy documents. This also includes complaints from those policyholders who find some discrepancy in their policy details and ask for endorsement. Policy related complaints also include any mismatch in premium and coverage.

Out of the total complaints in FY’12, 31,909 or 33%, complaints are claims related, which is 11.7% lower than 35,192 complaints in FY’11.

Complaints under others category has fallen by 48% to 8,136 in FY’12, against 15,761 complaints in FY’11.

Motor insurance policyholders filed 42,982 complaints in FY’12 as against 58,498 in FY’11, a dip of 26.5%.

Health insurance policyholders filed 34,836 complaints in FY’12 as against 45,132 in FY’11, a dip of 22.8%.

The complaints in motor and health segment are highest since these are retail policies and are made on huge number of policies. In corporate policies terms are customized and chances of misunderstanding of coverage are minimal.

Among the large private sector non-life insurers, ICICI Lombard received 23,735 complaints, while Bajaj Allianz General received 11,728 complaints and Cholamandalam MS General got 10,728 complaints.

Public sector non-life insurers resolved 87.77% of total 12,658 complaints. While, private sector non-life insurers resolved 99.94% complaints out of total 80,497 complaints.

Categories: News | Tags: Health Insurance, Motor Insurance, Non-Life Insurers, Policyholders

General Insurers Witnessed 25% Growth in Motor Insurance Segment

Posted on December 19, 2012 by Akanksha

No Comments

Non-life insurance companies have witnessed a growth of 25.26% in motor insurance segment. Non-life insurance companies garnered Rs 13,626.6 crores during April-September 2012 from motor insurance segment compared with Rs 10,878.3 crores in corresponding period last year.

At present, there are 19 non-life insurance companies that are offering motor insurance.

Among the top private non-life insurers, ICICI Lombard General insurance topped the chart with 30.68% growth with their premium collection from motor insurance segment pegged at Rs 1,198 crores during April-September 2012 as against Rs 917 crores in the same period last year.

Bajaj Allianz General’s premium collection from motor segment for April-September 2012 stood at Rs 1,093 crores as against Rs 920 crores in corresponding period previous year, a growth of 18.75%.

New India Assurance reported a growth of 29.06%, highest among public sector non-life insurers. Its premium income from motor insurance segment stood at Rs 1,770 crores in April-September 2012 as against Rs 1,371 crores in corresponding period last year.

During April-September 2012, National insurance collected highest premium from motor segment of Rs 2,076 crores as against Rs 1,655 crores in corresponding period last year, a growth of 25.48%.

Meanwhile, health insurance segment has reported a modest growth at 11.39% in April-September 2012.

Out of the 23 general insurers who offer health insurance plans, five insurers have seen a negative growth.

ICICI Lombard General insurance has witnessed a negative growth of 10.45% in premium collection to Rs 687 crores during April-September 2012 compared with Rs 768 crores in the same period last year.

From health insurance segment, New India Assurance collected highest premium of Rs 1,529 crores in April-September 2012 as against Rs 1,304 crores in corresponding period last year, a growth of 17.23%.

Currently, New India Assurance has highest market share of 15% among general insurance companies. Followed by United India, National insurance and Oriental insurance which held 14.01%, 12.81% and 9.7%, respectively.

Among private sector non-life insurers, ICICI Lombard has captured 8.41% of the overall non-life insurance segment while Bajaj Allianz General represented 5.63%.

Categories: News | Tags: Bajaj Allianz General Insurance, Motor Insurance, Premium

Health Insurance Plans