Motor Insurance Premiums Suffered Downfall to 15.7% in Apr-Aug!
Posted on January 05,2023
We people have already suffered due to pandemic, lockdown and still aching. It has impacted the whole of mankind and their businesses, the general insurance sector is one of them. In which the motor insurance section has gone through a dramatic decline during lockdown. The sluggish automotive market was already the reason for low business and pandemic proved to be double attack. The Managing Director of Shriram General Insurance remarks about the adverse impact of the pandemic on the motor insurance sector amid lockdown. Also enlightens, how to cope with the situation to recover the losses in conversation with Outlook Money journalist.
Also Read: How to protect yourself and prevent the spread of COVID-19?
How COVID-19 has impacted the motor insurance business during and after lockdown?
Before the pandemic, the automobile industry was facing a slowdown. And due to covid-19 the customers’ reluctance in buying motor insurance policies drops in the months of April-May. Whereas, the sale of new cars was minimum.
According to the Supreme Court order in 2018, the two types of motor insurance policies started offering by the insurance companies. One year of own damage (OD) cover along with three years of the third party (TP) insurance (bundle product) and three years of OD and TP insurance both (long-term cover). Now the three-year OD cover from August 1, has been rolled back while three-year TP insurance will continue. IRDAI’s decision to discontinue 3+3 and 5+5 long-term motor policies for brand new vehicles will hit the ticket size of the insurance policy.
There’s a decline of 15.73% in the April 1-August 31 period. Also, this time the health business overlies the motor insurance business and becomes the biggest non-life industry vertical with an increase of 13 per cent year-on-year growth. In five months, ended August 31, 2020, the motor premium fell to about Rs 22,253 crore from Rs 26,406 crore in the year-ago period. As the four PSU general insurers reported the decline of Rs 1,850. The premium rates for 2020-21 for third party liability insurance remain unchanged from last year’s rate.
Going forward how do you see the market behaving? What has been the claim percentage since lockdown?
The number of claims has come down to less than 5% of the normal which has saved something for us. But, the next 6 months may be tough regarding loss ratio because of increasing claim size. We are doing our best by providing various services to the policyholders such as Roadside Assistance cover. We provide services by chatbot integration, therefore digitization has been a great hit with our customers.
We are working on a quick and hassle-free self-inspection system. In this customers only need to take a snap of the damaged vehicle and send to the insurer through a shared link. Also, to encourage customers’ experience we are investing in the intermediary networks to provide them with technological backup. The automobile sector is expected to pick up the pace in coming months with launching new models. Shriram General Insurance registered Rs 1,001 crore profit before tax (PBT) in the FY19-20. Post lockdown, we are picking up that the premium growth in Q3 and Q4 would be a critical one. We expect to exceed in both the fields concerning PBT and premium growth in the current fiscal.
How insurers are handling the motor claims during the pandemic? What are the challenges faced by them?
To encourage customer’s engagement every organization is accommodating to digital mode and using new tools today. This results in filling up the claim settlement form online via the e-claim procedure. There is no need to visit the insurance office. Our claim representatives or surveyor support customers via video streaming. This has maintained the protocol of social distancing and keeping our customers safe.
The technological innovation helps customers to get their car or two-wheeler insurance claim easily within a day without any complications. This system has cut the trouble of making appointments and rushing to the office and garage repeatedly.
Read original article published on outlook money : Click here
Make your ride reliable, Insure it now! with Shriram General InsuranceInsure Now
You may be interested in
Love our blog posts?
Subscribe to get updates directly to your e-mail inbox
- Car Insurance
- Two Wheeler Insurance
- Motor Insurance
- Personal Accident Insurance
- Commercial Vehicle Insurance
- Travel Insurance
- Home Insurance