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Fire insurance premium may go up post July 1

Press Trust of India  |  Kolkata 

Come July 1, fire premium may go up since the regulator is trying to check the players from deep discounting in premium to gain market share.

A new set of burning cost 'referral' rates from the Information Bureau is going to be applicable from July 1 and that could see premium going up substantially in several 'occupancies'.

"With the new IIB reference data on burning cost for fire from July 1, several occupancies could see substantial rise in premium and leaving many untouched. But the changes being introduced could impact differently on each occupancies on companies," Assocham's council chairman and GM of National KB Vijay Srinivas told PTI.

"Our new set of reference rates for fire will be applicable from July 1 but these are not compulsory on companies," Information Bureau's CEO Kunnel Prem said.

As the industry loss ratios increased from around 30 per cent before de-tariff regime to 60-75 per cent for fire due to deep discounting on premium to gain market share, the regulator was trying to curb unsustainable premium rate war.

The idea is that burning cost should be proportion to premium so that a company does not make losses.

Information Bureau's CEO Kunnel Prem said number of occupancies has been increased from 85-90 to 101 as new industries have come up.

The list of risk occupancies have been revised from 90 to 101, he said.

In simple terms, occupancies in are referred as products, a sector or class of asset and different occupancies carry different risk of loss, officials said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sun, June 18 2017. 10:28 IST