Rs 10000 crores underwriting loss by our non life insurance industry during 2010-11 –it needs attention of all of us

Rs 10000 crores underwriting loss by our non life insurance industry during 2010-11 –it needs attention of all of us

It is disappointing to know that Indian general insurance industry which touched premium figure of Rs 42000 crores during 2010-11 has incurred underwriting loss of Rs.10,000 crore .Does it give a signal that for next 5 years these companies will go on incurring losses.
According to Mr. G Srinivasan, chairman and managing director, United India Insurance, commented that the challenges for both the industry and individual insurance companies are enormous.
Over the years, the general insurance industry may be making underwriting losses but the companies have huge investment income by which they have been able to cover up those losses and have been able to show reasonably sound balance sheet over the years, Srinivasan had said at an event in Mumbai.
“The situation will no longer continue because the quantum of losses are increasing. In 2009-10, the general insurance industry had made an underwriting loss of Rs.5,900 crore, whereas in 2010-11 the estimates is that the industry would cross Rs.10,000 crone underwriting losses. The general industry may have to record net losses in 2010-11,’’ he said.
It will be a good idea to know how many cases( number & Rs. Term) are pending against general insurance companies with the following;
Insurance Ombudsmen
Consumer forums at district,state and national level
Civil courts at district ,High Courts,Supreme Court
The figure will be astonishing.

What is the option before the Insurance Companies;
Refix the premium rates
Use the Insurance Broker firms in a big way
Totally do away with their direct sales force .
Strengthen underwriting team.
Merge with other company
Depending on investment income to show reduced losses or a marginal profit is not for what the promoters entered this business. A weak organization is no good for customers.