The Rs 84,000-crore general insurance industry feels that the 'use and file' norms unveiled recently by Irdai will ensure faster growth in the industry, though the regulations may lead to price rise of such products.
The new norms, coming into force from April 1, will allow marketing of corporate products even before regulatory approval.
"The new system would enable insurers to adapt faster to the requirements of commercial entities. All of these changes are positive, indeed path breaking," ICICI Lombard General Insurance managing director and chief executive Bhargav Dasgupta told PTI.
"We have asked the industry body General Insurance Council (GIC) to prepare the common wordings while designing covers for the corporates," New India Assurance CMD G Srinivasan, who is also the chairman of GIC, said.
"A price rise across the segments is very much expected", he said without divulging any further details.
According to Srinivasan, the new norms will bring in a great deal of discipline in the general insurance industry improving the financials of the industry.
"With the stipulation that the general insurers have to operate under 100 per cent combined ratio, the industry should see rate hardening which over a period of time would ensure underwriting profits," SBI General senior vice president, marketing and product development Gunjan Ghai said.
In some of the competitive risk areas, this would likely improve the profitability of insurers as a whole, he added.
Post detariffing in 2007 under which pricing of general insurance products are being determined by the market forces, the general insurance industry has seen a cutthroat competition in pricing of the products leading to losses in the industry. The only exception is third party motor premium which is the only product whose price continues to be fixed by Irdai.