Spurt seen in local liability insurance

Liability insurance is still a new concept in India, which has tremendous scope for growth, said Milind Kolhe, commercial underwriter, HDFC Chubb General Insurance Company, in Ahmedabad on Tuesday.

At present the general insurance market in the country is pegged at around Rs 16,000 crore, but liability insurance accounts for a small share of this market.

"There are several areas that are opening up fast in general insurance in the country and several corporates are coming forward to get insured against things like arrears and omissions, directors and officials' liabilities, loan care and the like. The overall awareness regarding liability insurance is picking up fast in the country and is set to grow at a huge pace," said Kolhe.

He was in Ahmedabad to address a seminar on risk management in cargo transportation, organised by the Gujarat branch of the Confederation of Indian Industry (CII) on Tuesday.

Speakers said while the awareness and need for liability insurance was not felt until recently, this scenario is fast changing.

"Nowadays things like transporting hazardous goods, providing services, directors' and officials' liabilities and the like are being considered for insurance," said Samir Shah, convenor, CII Gujarat's logistics panel.

He added that insurance companies are upbeat over business prospects and exporters have finally had their longstanding demand met.

Having achieved a premium collection of around Rs 120 crore for the 2003-04, HDFC Chubb is aiming at a premium collection of Rs 190 crore for the financial year ending March 2005.

HDFC Chubb General Insurance is a joint venture between HDFC and the US-based Chubb Group of Insurance Companies. HDFC holds a 76 per cent stake in the venture, while Chubb holds the remaining 24 per cent.

The company started operations in India two years ago. Starting with an emphasis on motor insurance, the company ventured into commercial insurance about six months ago.

The ratio of claims, both settled and outstanding, to the total premium collected for HDFC Chubb stands between 60 per cent to 70 per cent because the company is into motor insurance in a big way.

However, this claims ratio is lesser in terms of property and other insurance.