Rs 10000 crores underwriting loss by our non life insurance industry during 2010-11 –it needs attention of all of us

Rs 10000 crores underwriting loss by our non life insurance industry during 2010-11 –it needs attention of all of us.

It is disappointing to know that Indian general insurance industry which touched premium figure of Rs 42000 crores during 2010-11 has incurred underwriting loss of R10,000 crore .Does it give a signal that for next 5 years these companies will go on incurring losses.
According to Mr. G Srinivasan, chairman and managing director, United India Insurance, commented that the challenges for both the industry and individual insurance companies are enormous.
Over the years, the general insurance industry may be making underwriting losses but the companies have huge investment income by which they have been able to cover up those losses and have been able to show reasonably sound balance sheet over the years, Srinivasan had said at an event in Mumbai.
“The situation will no longer continue because the quantum of losses are increasing. In 2009-10, the general insurance industry had made an underwriting loss of R5,900 crore, whereas in 2010-11 the estimates is that the industry would cross R10,000 crone underwriting losses. The general industry may have to record net losses in 2010-11,’’ he said.
It will be a good idea to know how many cases( number & Rs. Term) are pending against general insurance companies with the following;
Insurance Ombudsmen
Consumer forums at district,state and national level
Civil courts at district ,High Courts,Supreme Court
The figure will be astonishing.

What is the option before the Insurance Companies;
Refix the premium rates
Use the Insurance Broker firms in a big way
Totally do away with their direct sales force .
Strengthen underwriting team.
Merge with other company
Depending on investment income to show reduced losses or a marginal profit is not for what the promoters entered this business. A weak organization is no good for customers.

Even a vacant locked house needs home insurance

It was interesting to read that a thief got into a vacant locked house in Greater Noida and things like wash basin,taps have been stolen.

Many a times when we talk to people about need for home insurance then we get reply that ours is a vacant house therefore what a thief can steal.

Now that plumbers have also become active therefore it will be better that one goes in for home insurance,whether it is vacant or is occupied by residents.

Should paintings & artefacts be covered under home insurance policy

In 2008 we find pedal cycle being a section in propsal forms of all insurance co's.Paintings and artefacts are appearing nowhere in the proposal form. If somone puts amount of Rs 1 lakh for a painting then the clien /propser is asked to delete this

Insurance co's go on repeating the forms which were relevant in 1950's and 60'sToday when people are having apartments costing Rs 100 lakhs to Rs 500 lakhs it is reasonable to accept that those homes are also having paintings and artefacts worth Rs 5 to 15 lakhs.

It is time for our insurance industry to realise that more money can be made by insuring painting worth Rs 10 lakhs than 8000 pedal cycles of Rs1200 .Let us become an insurance co of 2008 and not follow the forms of 1950.The market has grown.Let us grow.