Regulator Irda has indicated that the premium in the case of a “catastrophe insurance” may go up in light of a number of natural disasters hitting various parts of the country in the recent past.
“The general insurance industry on a whole is not making a lot of money. It requires some base correction in premium rate, especially in a case like the recent heavy rains in Chennai, which resulted in a huge loss,” Irdai Chairman T S Vijayan said here today.
He was interacting with reporters on the sidelines of a global conference of actuaries.
“Suppose a disaster takes place in a desert… There may not be much of loss. The Hudhud cyclone (in 2014) didn’t enter the Vizag city.
Had it entered the city, the loss would have been much bigger. Hence, a base correction in premium rate is required in the catastrophe insurance sector and I’m sure insurers must be looking into it,” he said.
Irdai is not content with the 1.8 per cent expansion the insurance industry during the last fiscal and is hoping for a pick-up in growth in 2015-16.
“If you look at the Indian insurance industry, 2014-15 saw a positive growth, but not to the extent which one would have expected.
“Real growth was just 1.8 per cent, and the coverage was lowest among Asian markets, which recorded a real growth of 6.5 per cent.
Emerging markets grew at 7.4 per cent, advanced countries 2.9 per cent, while India could grow only by 1.8 per cent,” he told the conference earlier.
“This year (2015-16), we should be able to make up for the growth and the industry needs to identify which are the things relevant for capturing the customer’s mind and wallet share,” he said.