The general insurance industry hopes to increase third-party motor insurance rates for 2021-22.
The rates are notified by the Insurance Regulatory and Development Authority of India (IRDAI) annually and were unchanged last year due to the Covid-19 pandemic.
The new rates for 2021-22 have not yet been notified by IRDAI.
According to general insurers, the premium needs to be reviewed to make the segment sustainable.
Moreover, recent court rulings have also had an impact on the sector.
“Our view is that we didn’t get a rise in rates last year. Prior to that in February 2020, an exposure draft for progress had come but then the first wave of Covid happened and that was put in the cold store, ”Bhargav Dasgupta, Managing Director and CEO, ICICI Lombard, General Insurance, had say after the fourth quarter leading to a media call.
In response to a question, he also pointed out that even in past claims, court judgments had had an impact. However, he did not comment on the expected quantum of rate hiking.
Covid -19’s pandemic and lockdown had denied motor claims in the initial months but they have begun to get back to normal, according to insurers.
Meanwhile, industry data shows some traction in motor insurance premiums in recent months.
In 2020-21, third-party motor premium increased 4.4 per cent to ₹ 10,650 crore compared to ₹ 10,198 crore in 2019-20.
However, overall, motor premium fell 1.68 per cent to ₹ 67,790 crore last fiscal.
“In 2021-22, coupled with the anticipated increase in the health segment, any increase in premium levels of the Motor TP segment, which was held steadily in 2020-21, could drive the non-life premiums,” Care Ratings had said in a recent report.