Motor combined ratios may see improvement in FY17

The combined ratios of general insurance companies in the motor insurance segment may seen an improvement with the third party premium hike and declined pool being dismantled. Combined ratios had exceeded 100% for insurers meaning that the claims paid were much more than the premium collectedIn FY17, the motor third party premiums went up by increase of 10-40% from April 1 in the private cars and two-wheeler segment. Insurers said that taking into consideration the heavy losses in the motor segment, this rate hike was given which has been proportionally higher than the previous yearsWhile rates went up by 40% for all private cars with engine capacity under 1,500cc, it went up by 25% for cars with a higher engine capacity. Insurance Regulatory and Development Authority of India (IRDAI) in its circular said the cost inflation index had increased by 5.57% year-on-year, from 1,024 in FY15 to 1081 in FY16.However, the regulator cautioned insurers against denying or refusing to provide third-party covers for any vehicle. For two-wheelers, there would be a rise of 10-15% for vehicles up to 150cc, with a 25% hike in for two-vehicles with engine capacity of 150-350 cc. Share Market Astrology

Third-party motor premium is regulated by IRDAI and revised yearly, based on inflation and claims. While TP insurance is mandatory, own damage or OD insurance is optional for individuals. This type of insurance is mandatory for all motor vehicles on roads and covers the owner from third-party liability arising out of accidents or damage.Overall, the net incurred claims of non-life insurers stood at Rs 55,232 crore in 2014-15, against Rs 49,179 crore in 2013-14. The incurred claims exhibited an increase of 12.31% in FY15.Among the various segments, health insurance and motor insurance had a high claims ratio at 96.93% and 77.14% respectively. In the motor insurance space, while premiums had seen growth, rewards from the compensation from third-party incidents had seen a 20-30% growth.Bearing losses from the declined pool was also a cause of worry. However, the Declined Risk Pool for Commercial Vehicles that was in operation from April 1, 2012 has been dismantled from April 1, 2016. Sector executives said that this will lead to an improvement in the quality of motor business.IRDAI in its Obligation of Insurers in respect of Motor Third Party Insurance Business Regulations, 2015 which specified the insurers to underwrite minimum obligations in respect of Motor Third Party Business. This was based on a formula taking into account factors like total 'Gross Direct Premium Income (GDPI)' under all lines of business of all insurers in the immediate preceding financial year, total GDPI under motor insurance business of all insurers in the immediate preceding financial year among othe Nifty Trading Tips.

At present. motor insurance in India continued to be the largest non-life insurance segment business wise. It reported growth rate of 10.52% in last fiscal (14.15% in 2013-14), as per Insurance Regulatory and Development Authority (IRDAI). However, losses with respect to claims have been high.Overall, the net incurred claims of the non-life insurers stood at Rs 55,232 crore in 2014-15 as against Rs 49,179 crore in 2013-14. The incurred claims exhibited an increase of 12.31% during 2014-15.Among the various segments, health insurance and motor insurance had a high claims ratio at 96.93% and 77.14% respectively. In the motor insurance space, while premiums have seen a growth, rewards from the compensation from third party incidents have seen a 20-30% growth. Jackpot Stocks Trading Tips