Development
has been indefinable for the general insurance industry in India. During last
three years, the non-life industry has been a slowdown. As per the numbers on
gross premium underwritten till November 2014, this sector grew by 9.24
percent.
It grew 12
percent in FY14 and nearly 19 percent in FY13. Development is slow because of
economic situation and sector hasn’t planned proper measures to improve
insurance penetration. Awareness level is definitely increased but still low
for development to pick up.
Have a look
on below mentioned reforms initiated by Insurance Regulatory and Development
Authority to make positive changes:
• Long-term Car Insurance Plans
In auto
insurance, IRDA allowed insurance companies in India to register long-term
compulsory third-party coverage for two-wheelers for a period of 3 years.
Majority of two-wheeler owners are not covered because they don’t want to
involve in the hassle of policy renewal process every year.
Today,
around 70 percent of the two-wheelers owners are uncovered. Hence, a long-term
coverage is a more sensible move. In case of private automobiles, nearly 85
percent are covered so that category is not an issue.
• Hike in Premiums
IRDA showed
concerns about costs of non-life plans not being sufficient owing to tough
competition after the sector got de-tariffed. IRDA has suggested that the
burning rate should be the beginning point while costing property, group
mediclaim and fire policies from next year. Burning rate is the cost of pure
loss or the cost of insurance claims. The industry is moving towards a claim plus
pricing mechanism.
It creates
concern to those customers who have availed attractive deals on group health
insurance and fire policies. Insurance companies will cost equal with the risk
factor. The sector is operating on a combined ratio that means the cost is not
correct and will get mirrored in the sector’s reluctance to pay claims.
• Smaller Company Health Coverage
Health
insurance guidelines were implemented in 2013 and made policies more
customer-friendly. Standardization of terms has brought awareness among buyers
and decreased confusion. Now, insurance companies in India have concentrated on
insurance products innovation.
Generally,
most people still depend on mediclaim policies coverage offered by their
employers. Many group health insurance have stopped insuring policyholder’s
parents or providing maternity cover.
• General insurance
Insurance
contracts that do not come under the ambit of life insurance are called general insurance company . The
different forms of general insurance are fire, marine, motor, accident and
other miscellaneous non-life insurance.
Description: The tangible assets are
susceptible to damages and a need to protect the economic value of the assets
is needed. For this purpose, general insurance products are bought as they
provide protection against unforeseeable contingencies like damage and loss of
the asset. Like life insurance, general insurance products come at a price in
the form of premium.
Source from
: http://blog.policyboss.com/tag/general-insurance-industry-in-india/
