Home | Join | Login | Help | Chinese | GCP | Forum
 
Logistics Zone
Members
Resources
My Jctrans
Welcome jctrans.net!
Resources
   
Focus | News | Exhibition | Policies & Law | Industry Research | Tools Online
Home > Jctrans.net > News > Logistics
 
 
Non-life insurers reject transporters' demand
POSTED: 9:59 a.m. EDT, January 19,2007

Non-life insurers have closed ranks and rejected transporters' demand for a rollback in tariff hikes of third party insurance covers.

The transporters had represented to the insurance regulator for a roll-back of the 126-150 per cent increase in third party risk premia, effected coinciding with the migration to the free pricing regime. They had contested the database of the non-life insurers for pushing through the tariff hike.

However, top officials who attended a meeting convened by the insurance regulator early this week said that they (insurers) had conveyed to the transporters that if the data on third claims were taken as the basis, "then the hikes would be far higher."

According to the data, third party claims are in excess of 175 per cent of the premia collected. But for the tariff hikes, there were few other ways of preventing the non-life insurance companies from going into the red, sources said.

Profits from investments


So far what has prevented companies from having red-lined balance sheets were the profits from investments. Last year alone, each of the companies had sold part of their investments and each realised profits upwards of Rs 500 crore.

The profits realised through such trading activities were used to buffer the balance sheets and prevent any weakening of the solvency ratios. The solvency margin is the excess of capital and investments over the value of the insured liabilities.

However, the sources said, there were limitations to using investments to make profits. This was especially in a situation where underwriting, the core business, was loss-making. Underwriting losses of the four public sector non-life insurers for the last financial year were in excess of Rs 3,800 crore. Underwriting losses from the miscellaneous portfolio that included motor Third Party (TP) were Rs 3,600 crore.

Given this situation, the objectives of the rationalisation of TP, the sources said, were to ensure that the core business became profitable. This was also because investments are technically policyholders' funds.

Next meeting


The sources said that the next round of meetings between truckers and the insurer would be held again on January 23.

At this meeting, the insurers have indicated that they would stick to their position though they would convey that the current high tariffs were not likely to be a permanent phenomenon.

The officials said that some correction was likely to take place as the claims come under control once the free pricing regime discipline is "fully reinforced."

Among the first steps that are in place for this correction is the transfer of all the third party risks into the India Motor Insurance Pool, effective from the beginning of this year.

Besides, as the competition increases for low claims portfolios, tariffs would eventually drop, they added.

From:BusinessLine
Logistics>>
Print | Save


RELATED

Today's Top News
 
Weekly Roundup

Freight Forwarder Korea
Forwarder in Japan
 
 
Tools Online
Cargo Tracking
Chinese Port Charge List
World Port
Country Code
Shipping Dictionary
Unite Conversion
                More>>
 
 
 
 
Home - Shipping - Airfreight - Integration - Member - Resources - My Jctrans - Links
About Us - Help - Contact Us
嶄猟利
Privacy Policy - Terms of Use
Copyright Notice 2000-2007 Jctrans.com Corporation and its licensors. All rights reserved.