The Insurance Regulatory and Development Authority of India (IRDAI) on Monday released business figures which indicate a substantial growth in the premium income underwritten by general insurance companies in September. Premium income rose to ₹20, 145.46 crores in September from ₹14,463.60 during the same time last year. Overall, general insurers witnessed a growth of 16.84% compared to last year. Major chunk of general insurers’ revenue is drawn from the sale of motor insurance policies. However, passenger vehicle sale continued to disappoint with a plunge by almost 24% in September, according to data released by the Society of Indian Automobile Manufacturers (SIAM). If the purchase of new vehicles is going down, what’s really fuelling the sale of motor insurance policies?
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General insurance companies seem to be enjoying the spike in the sale of motor insurance policies. After the amendments to the Motor Vehicles Act, not having a third-party motor insurance attracts a fine of ₹2,000 for the first offence and a fine of ₹4,000 for the second offence. The high penalty is contributing to the increasing sale of motor insurance at a time when the automobile industry is struggling. “August to September, the sale of motor insurance saw a significant rise because there’s a high penalty now.
Source: livemint
