India union Finance Minister Pranab Mukherjee has asked the Insurance Regulatory and Development Authority (IRDA) to address the problem of ‘suicidal competition' among insurers as they increasingly offer policies on lower premium eyeing a bigger market share and suffer on financial position.
Mr. Mukherjee said: “To ensure prudent underwriting and curbing unhealthy and suicidal competition among the companies through undercutting premiums is something that the regulator will need to address suitably.”
The finance minister was speaking at the 72nd meeting of the IRDA board. He said that there is unhealthy competition between the insurance companies in the industry for grabbing bigger market share. He said this cut throat competition is already beginning to affect the balance sheets of the companies in the industry.
He said that as the insurance companies are now free to fix premiums for their policies, the companies have significantly lowered the premiums and this is affecting their financial position.
Mr, Mukherjee observed that despite the competition for a bigger market share the penetration level of insurance in the country remains low. He said India is an underinsured market with financial vulnerability among most income groups.
Mr. Mukherjee said: “To ensure prudent underwriting and curbing unhealthy and suicidal competition among the companies through undercutting premiums is something that the regulator will need to address suitably.”The finance minister was speaking at the 72nd meeting of the IRDA board. He said that there is unhealthy competition between the insurance companies in the industry for grabbing bigger market share. He said this cut throat competition is already beginning to affect the balance sheets of the companies in the industry.
He said that as the insurance companies are now free to fix premiums for their policies, the companies have significantly lowered the premiums and this is affecting their financial position.
Mr, Mukherjee observed that despite the competition for a bigger market share the penetration level of insurance in the country remains low. He said India is an underinsured market with financial vulnerability among most income groups.
No comments:
Post a Comment