HDFC ERGO General Insurance has announced a revision in its motor insurance pricing, which the company says will benefit existing and new customers nationwide, as premiums will reduce by up to 15 per cent.
It is the receipt of various benefits that have accrued through internal and macro policy changes that warranted this reduction by the third largest private non-life insurance provider.
With the commencement of the Goods and Services Tax (GST) on July 2017, there has been a rationalisation of costs, which the company says it has benefitted from. Additionally, the insurer's cost optimisation initiatives such as automated processes, have also contributed to the reduction in premiums in the motor-vehicle segment.
Total premiums earned by the entire motor insurance segment for the year ended March 31, 2017, stood at Rs 5.36 billion, up 139 per cent from Rs 2.23 billion at the end of FY2016.
Total claims received by the motor insurance segment rose by 180 per cent from Rs 1.7 billion at the end of FY2016, to Rs 4.8 billion at the end of FY2017.
Operating expenses in the segment have also been pared consistently. Over the past two financial years, the total operating expense for the motor insurance business came down by 19 per cent, from Rs 1.62 billion in FY2016 to Rs 1.36 billion in FY2018.
Mukesh Kumar, executive director, HDFC ERGO says, “Customers’ interests are of prime importance, which we endeavour to constantly improvise through the use of automation and improvement in our processes. With this thought, we are happy to share the benefits arising from these initiatives with our valued customers by way of revision of premiums on motor insurance by up to 15 per cent over the existing rates.”
“The Corporation is also exploring inorganic opportunities in the sector in conjunction with its subsidiary, HDFC ERGO General Insurance Company Limited and is evaluating opportunities in the acquisition and resolution of stressed assets in the real estate sector,” HDFC had said in a January.