The Insurance Regulatory and Development Authority recently raised third-party motor premium, which is still under tariff. KN Murali, senior vice president & head – Motor vertical, Bharti AXA General Insurance talks about impact of IRDA changes
The Insurance Regulatory and Development Authority (IRDA) recently raised third-party (TP) motor premium, which is still under tariff. The increase may not be sufficient considering huge losses with third-party motor pool. Another change made by the regulator was to dismantle the third-party motor pool which will mean that insurance companies will have to manage the risk without passing the losses to the pool. Will it put pressure on increasing the premium of 'Own Damage' motor insurance as well? KN Murali, senior vice president and head-Motor vertical, Bharti AXA General Insurance talks about impact of IRDA changes.
Money Life (ML): Third-party (TP) premium, which is under tariff, has not been raised enough to cover the losses. Will it put pressure on 'Own Damage' (OD) premium?
KN Murali (KNM): In case of private cars, TP premium has gone up between 4% and 6% from April 2012. In the private car portfolio, TP losses are hovering around 90%. Though the average increase by 5% may not be fully adequate, the overall private car book is profitable. We do not foresee any reason to push up the price on OD section for the inadequate premium increase in TP portion. In the case of commercial motor segment, OD premium can move up on account of inadequate increase in TP risks.
Inflation can push up premium for OD section. Repair costs and cost of spare parts have been increasing. Depreciation of the rupee against dollar/yen has increased the cost of spare parts in cases where the spare part is imported. Loss ratio varies between vehicles that use petrol and diesel as fuel. A higher loss ratio is seen in diesel segments.
ML: How much will overall premium increase?
KNM: Each of the insurers does a pricing correction in the private car portfolio based on their loss ratio and mix (geography, manufacturer make/model). The northern part of India may witness a higher increase. Unprofitable make/models may suffer higher increase in premium.
ML: Why have insurers not increased OD premium in the past? Was it because of common third-party pool to absorb the losses and hence insurers did not feel the onus?
KNM: Pricing correction in the private car segment has been happening in the past as well by insurers depending on their book and their loss experience. It is not that insurers have not increased pricing on OD section earlier.
Further, TP pool losses were passed on to all the insurers based on 'overall' market share. Few insurers were focusing only on motor, thereby drawing subsidy from other insurers on TP pool losses. With the pool dismantled, every insurer has to protect their book and have to appropriately price their book.
ML: What is the impact of dismantled third-party motor pool?
KNM: IRDA has directed the insurers to provide a reserve at 145% on the TP risks in commercial motor for the year 2011-12. Each of the insurers has been ascertaining their liability based on actuarial valuation. Actuaries of the regulator would do the checking of the statements of individual insurers and sign off. As of now, the work is in progress and we will not be able to give the actual impact.
ML: Will most of the commercial vehicle third-party underwriting go towards Declined Risks pool as insurers may be averse for providing insurance?
KNM: Insurers are given a minimum quota of standalone TP policies that they have to write in their books. If the quota is not met, Declined Risks pool will allocate business back to insurers to the extent of shortfall. We do not expect insurers to avoid risks; it is also mandated that no insurer can deny standalone TP risk. Customers should not have any issue in getting the cover freely.
Tejinder Singh, accused by the Army Chief VK Singh of attempting to bribe him, had retaliated against the Army Chief. But he has been pulled up by the lower courts while the Delhi HC questioned maintainability of Tejinder Singh’s petition and now suddenly he withdrew his petition from the apex court
New Delhi: In a surprise move, retired Lt Gen Tejinder Singh on Thursday withdrew his petition from the Supreme Court seeking a Central Bureau of Investigation (CBI) inquiry into the alleged misconduct of Army Chief General VK Singh. It may be recalled that Gen. VK Singh had accused Tejinder Singh of offering him bribe of Rs14 crore for purchase of Tatra trucks. Following the complaint by the Army Chief, the CBI initiated a probe into the matter.
Immediately thereafter, on 25th April, Tejinder Singh had approached the Supreme Court seeking a CBI inquiry on the alleged role of the Army Chief in the purported bugging of the defence minister's office and action against him for "misconduct". The government has already denied reports of bugging.
Appearing before a bench of justices P Sathasivam and J Chelameswar, senior counsel Rajiv Dhawan urged the court to grant permission for withdrawing the petition. "Your lordships please don't open the file at all. Kindly grant me permission to withdraw the petition and move the appropriate forum," Dhawan urged the court. Accordingly, the bench granted permission for withdrawal of the petition.
Tejinder Singh, under cloud following Gen. VK Singh's allegations, had also accused the Army Chief of professional misconduct by making "political statements" while holding the key post. He had alleged the Army Chief had stated that the Maoist problem in the country is the creation of the government when the Centre had sought help of the Army in Naxal-affected areas. Tejinder Singh had made the Army Chief a party in his petition. The Army Chief is seen an exceptionally upright officer.
Tejinder Singh has also filed a criminal defamation case against Gen VK Singh and four other senior army officers in a trial court. He told the Delhi Metropolitan Magistrate that a press release issued by the army headquarters on 5th March levelled serious allegations against Lt Gen Tejinder Singh.
Alleging that the officers misused their official position, power and authority to level false charges against him, the retired army officer in his complaint has also named army vice chief Lt Gen SK Singh, Director General for Military Intelligence Lt Gen BS Thakur, Additional Director General of Public Information Major Gen SL Narsimhan and Directorate General of Public Information staff officer Lt Col Hitten Sawhney.
Earlier on Monday, the Delhi High Court questioned the maintainability of Tejinder Singh's petition, which seeks withdrawal of an alleged defamatory press release accusing him of offering a bribe to the Army Chief to clear a defence deal. The high court also asked the retired army officer to prove that the right to reputation is a fundamental right.
"You show and satisfy me that right to reputation is a fundamental right. Do not argue in the air and come prepared with the case laws," justice Mukta Gupta said.
The matter is also being investigated by the CBI, which recorded General VK Singh's statement last month and questioned Lieutenant General Tejinder Singh last week.
The partnership provides a range of disbursement and bulk payment solutions in the industry and also enables corporations that need to issue large numbers of payments to reduce their costs by disbursing funds electronically
Mumbai: Visa Inc said it partnered with mobile and instant payment solutions provider Obopay for near real-time payment solutions for disbursing electronic funds to a prepaid card. Obopay will offer its partners the ability to disburse funds from their corporate account directly onto a Visa prepaid card which they can provide to a payee.
The capability can benefit a range of industries including insurance, payroll, rebates, incentives, business expenses, government disbursements or any other bulk payment need, and can be particularly valuable in situations in which recipients have an immediate need for funds, Visa said in a release.
"Adding Visa prepaid cards to Obopay Disbursements enables our partners to send funds to any consumer in the US at dramatically lower costs compared to issuing checks while they can also greatly increase the satisfaction of customers," said David Schwartz, vice president of product and corporate marketing for Obopay.
The new offering is available immediately as part of Obopay Disbursements. With Obopay Disbursements companies can disburse funds using digital payments in place of issuing physical checks or cash, allowing for more timely disbursement of funds, dramatically reducing the employer's costs and increasing security, convenience, and recipient satisfaction. With the addition of Visa prepaid cards, recipients don't have to wait for and then cash a check or handle large amounts of cash. The solution also enables funds to be disbursed via the PIN debit and ATM networks to which Obopay is connected, as well as via ACH, the release said.