High-end cars to drive motor insurance in 2014: ICICI Lombard

Motor insurance space saw a 12% rise in liability premium and nominal growth in the two-wheeler segment

Next year, high-end cars will drive growth in the motor insurance segment, ICICI Lombard General Insurance has said in its outlook for the health and motor insurance segments for 2014.

The company said the motor insurance space had seen a 12 per cent increase in liability premium and nominal growth in the two-wheeler segment. It added the launch of new add-ons had contributed to the overall increase in own-damage premium.

Sanjay Datta, chief (underwriting and claims), said more risk-based pricing would be introduced in the motor segment—factors such as where the vehicle was being driven, and whether it was chauffeur-driven or not would be considered. The company said though there had been an increase in third-party motor premia, further increases were needed next financial year.

On products in the segment, ICICI Lombard said the category could see demand for covers such as engine-protect and voluntary deductible. Engine protect covers consequential losses such as damage to engines arising due to insufficient lubricants, water lock, etc, while voluntary deductible provides discounts on premium for a higher deductible chosen by the customer.

On health insurance, it was felt the pattern of diseases was shifting towards non-communicable ones. Neoplasms (such as cancer) stood at 11 per cent in 2013-14, compared with eight per cent in 2009-10. Further, the company saw higher growth in medical inflation related to reimbursement cases (12 per cent in 2012-13, against 10.2 per cent in 2011-12).

Datta said, “We believe 2014 would be better, in terms of growth across the health and motor insurance segments. Apart from macroeconomic factors, the industry is poised to enhance its value proposition across the product and service spectrum. It should be an exciting year for health and motor insurance customers.”