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ICICI Lombard to be restrictive towards weather insurance

The company has paid claims at a rate of 2.5% of their losses in the case of cyclone Hudhud, to the tune of Rs 100 crore, they said

Press Trust of India  |  Mumbai 

In a bid to maintain its bottomline, India's largest private sector non-life insurer has decided to cut down its exposures in certain segments, including

"We are restrictive towards sectors like Even though we have been participating in national crop programme (NCIP), still we are a bit cautious towards the sector," Chief for Underwriting and Claims, Sanjay Datta told PTI.

The government has implemented the NCIP with an objective of increasing the coverage of farmers/area and also to create competition in crop insurance sector.

Talking about NCIP, he said the programme is likely to see the increase in the coverage of crop land from currently existing mark of 25% as the government is going beyond traditional crops like bajra for the scheme.

The insurer paid claims of around Rs 100 crore in the case of cyclone 'Hudhud', which hit coastal Andhra Pradesh and Odisha in October.

"We have paid claims at a rate of 2.5% of our losses in case of the recent cyclone (Hudhud) to the tune of Rs 100 crore," Datta said.

The general insurer posted a marginal fall in premium income during the second quarter of the current fiscal. Its premium income fell to Rs 1,638 crore at the end of the second quarter from Rs 1,700 crore in the same period last fiscal in line with the industry trend.

The drop was mostly due to fall in the motor insurance premium as sales in the sector dipped.

About the investment income made by the company so far, he said, "We have made an investment income of Rs 200 crore as on September 30. The company's profitability remained flat during the second quarter of the current fiscal at Rs 156 crore as against Rs 158 crore during the year-ago period."

Datta said rates have bottomed out in the property segment of the general insurance industry.

"Rates have bottomed out in the property segment and hence I see discounts being offered by the industry. We are incurring loss to the tune of Rs 4000 crore in this segment. Coming to motor insurance, we do see an annual loss of Rs 3,000 crore."

On health insurance, he said, "It's corporate health where we need to correct pricing which must be risk-based and usage-based one."

On health insurance outlook for 2015, he said e-cashless module will gain prominence in the year ahead.

About motor insurance, he said the automobile segment continued to witness muted demand.

However, scooters (132% growth) provided a silver lining, while car sales have grown by 40% in the April-November period, he added.

First Published: Thu, December 18 2014. 10:25 IST