“Aggressive pricing has increased pressure on insurers competing for large corporate accounts,” said a CEO of a large general insurance company.
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The Insurance Regulatory and Development Authority of India has received complaints of discounts of as much as 99% on large industrial fire risks, raising concerns over insurers’ financial health and underwriting discipline.
In a communication to managing directors and chief executive officers, the regulator said pricing for large industrial and commercial fire risks should be based on sound actuarial principles, as these are low-frequency but high-severity risks where a single claim may be many times the premium collected.
The impact was visible among large insurers. New India Assurance reported ₹1,681 crore in fire premiums in the period, down from ₹2,241 crore a year earlier. Listed players like ICICI Lombard reported ₹1,248 crore against ₹1,815 crore, while Go Digit brought down fire premium to ₹223 crore down from ₹413 crore.