Awaiting final decision from IRDA: New India Assurance

The decision needs to be taken on third-party motor insurance segment to curb mounting losses from the segment

Public insurer New India Assurance is awaiting a "final decision" from the Insurance Regulator Development Authority (Irda) on third-party motor insurance segment to curb mounting losses from the segment.

"We are awaiting final decision from the (insurance) regulator (on this matter)...," New India Assurance Chairman and Managing Director G Srinivasan told reporters here.

He was responding to a query on the steps taken by his company in the wake of mounting losses in the third-party motor insurance segment coupled with commercial vehicle industry which has been on downtrend.

"What we are looking at is break-even," he said.

Earlier this year, Irda released an exposure draft in which it proposed for an increase in premium for third-party motor cover for 2014-15.

As per the draft, the regulator looks for an increase of 25-137 % rise to attain breakeven in this segment.

New India Assurance has also suggested that there has to be a 50 % rise to attain break-even in this segment.

"Goods carrying vehicles and the commercial vehicle industry has been on the downward trend in the last two ears. The industry has lost thousands of Crore.", he said.

The company's total exposure in the third-party segment was about 10 %(including commercial vehicle industry), he said.

Asked on his plans for the third-party motor segment, he said, "we need to get back the lossess (we incurred). We need to wait and see.".