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.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

"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 on Monday.

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% 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%, and the coverage was lowest among Asian markets, which recorded a real growth of 6.5%. Emerging markets grew at 7.4%, advanced countries 2.9%, while India could grow only by 1.8%," 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.