Discounts drive up insurance cos' claim ratio

Heavy discounts in premium rates after deregulation and greed for a greater market share have increased the claim ratio of the general insurance companies. In 2007-08, the general insurance industry mopped up Rs 19,287.47 crore as net premium income and paid Rs 16,370.36 crore as claims - amounting to a total claim ratio of 84.88 per cent, according to latest data with the Insurance Regulatory and Development Authority (Irda). The claim ratio for a company is calculated as the amount of claims paid divided by the premium earned. The lower the claim ratio, the better it is for the company. ...

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