Facing increasing complaints about fraudulent claim practices, especially involving stolen vehicles, the Tariff Advisory Committee (TAC), which is the data repository for non-life insurance industry, has decided to selectively share motor vehicles industry statistics with general insurance companies.
Currently, non-life insurance companies are not allowed to access industry-wide data, which each company sends to TAC every quarter.
“The purpose behind the move is to have integrated database that could help non-life insurance companies in rooting out common problems relating to stolen vehicle tracking, claim history verification, and rationalization of prices,” said K.N. Bhandari, secretary general of General Insurance Council (GIC), the representative body of non-life insurers, both public and private sector.
The GIC official said they have decided to begin with motor insurance because it is the largest premium earner for general insurance companies—around 50% of the total premium collected is from motor insurance business.
“Within two months, we shall be able to share motor insurance data with all general insurance companies,” said Alok Kumar, head of motor insurance project of GIC. “Gradually, other insurance segments would also get included.”
General insurance companies have rejoiced at the news because data sharing would lead to scientific basis for pricing and better claim verification.
“With the second phase of tariff-free regime soon to be implemented from November, integrated data base would help us in revisiting third party premium rates,” said Kartik Jain, head of marketing and e-channel of Mumbai’s ICICI Lombard General Insurance Company Ltd.
Third-party insurance covers any permanent injury or death to a person caused by your car.
In addition, it covers any damage caused to the property, excluding vehicle, of some other individual by your vehicle. After de-tariffing, third-party premium rates have jumped up substantially.
“Integrated data base would also help in tracking down stolen vehicles that again come for insurance,” said Jain. Industry experts say that as much as 15% of all motor vehicles claims are for theft.
Niraj Kumar, general manager of Oriental Insurance Co. Ltd, a New-Delhi based company, said, TAC has changed its role from working out tariffs to data provider.
“The combined market data would help us know whether the company’s data is corresponding with the industry pattern.”