Automobile shape and remote control key inside the vehicle | Photo credit: Brianajackson
General insurers are concerned with the delay in notification of the rates of third-party engines (TP) rates for 2025-26. Then, insurers are collecting premiums announced last year.
If the new rates turn out to be higher, insurers run the risk of incurring a loss, while if they are lower, it will be a loss for customers who have already bought coverage.
The coverage rates of third -party mandatory engines are announced annually after a consultation between the regulatory and insurance development authority of India (IRDAI) and the Ministry of Transportation on the road.
When it was contacted, a senior IRDAI official said that the ball was in the government’s court and that the Ministry group applied the final notification after the regulator’s recommendations.
“The rates of the current financial year were supposed to be announced in the last week of March before the end of the financial year for the applicability of the facilitation of the new rates of the new financial year, that is, on April 1, 2025.
“The delay, which could be promoted by the Ministry of Transportation on the road, is increasing to Conern, since we expect a 10-15 percent increase in the premium for certain categories of vehicles,” said the MD and CEO of a private general insurer Business line.
Around the last five years, the increase in the rate of third-party premiums has one leg in the range of 2-4 percent.
Assembly losses
“In the context of increasing claim costs and third -party awards rates, the industry is incurring losses. This will also affect solvency relations. We expected the announcement at least in the first week of this month, but it will not happen,” he added.
According to the Head of Subscription of another insurer, there must be clarity in the case of the decision to continue with the existing rate, since it helps insurers to prepare such financial impact.
For a balance
In view of the increase in cases of traffic accidents, it is even more important to guarantee the financial health of the industry, while the concerns about the social security of the victims are equally important, said a senior official of a general insurer of the public sector.
According to the Motorized Vehicle Law, third -party car insurance provides financial protection for the injured or whose property is damaged in an accident.
Ensures that victims receive compensation for their injuries and property damage.
The industry also sees an urgent need to increase the premium of certain categories of segments of goods/commercial vehicles where there has been no increase in three years, said a senior official of a public sector insurer.
Posted on April 22, 2025