Amid mounting losses in the third- party motor insurance segment, coupled with rising claims, insurers have urged the regulator to hike the premium by at least 50% next fiscal, top officials of general insurance companies said.
"If you see the way claims are settled and the annual rise in claims, there should be a 50-60% hike in third-party motor insurance premium," Reliance General Insurance chief executive Rakesh Jain told PTI.
He also said commercial vehicle segment is bleeding, which needs to taken into account to take care of losses.
Another official from a private sector general insurance also echoed similar sentiment.
"On an average a 50% hike is required taking into account rising claims and costs," Bharti Axa General Insurance chief executive Amaranath Ananthanarayanan said, adding the premium should rise more for commercial vehicles, where loss ratios are high for the industry.
Last week, Irda (Insurance and Insurance Regulatory and Development Authority) had released an exposure draft in which it proposed a steep rise in premium for third- party motor cover for 2014-15.
As per the draft, the regulator wants an increase of 25- 137% in premium for private cars and 1-45% hike for two-wheelers.
Third-party cover is mandatory for all vehicles, premium of which is determined by the regulator.
Earlier, the largest insurer New India Assurance also said 40-50% rise is required to attain breakeven in this segment.
"A 40-50% increase is needed to make the motor third party portfolio break-even, that is the reasonable increase we are looking at," New India Assurance Chairman and managing director G Srinivasan had said.