'Change in tariff norms necessary'

What kind of growth are you looking at and what are your focus areas?
On a conservative basis, the company is confident to register a growth rate of 8% this fiscal and around 10% next fiscal. While maintaining a sound and conservative policy, which is important in the long term, this is a good growth rate. It is also important to have high portfolio rating. Currently we are having the highest. In addition to the domestic market, I am also looking at getting inward premium from the reinsurance market. Our balance sheet size is enough to do reinsurance business on a global scale.

We are looking at participating in a consortium for reinsurance market. Even if we managed to get 5% share in the consortium, it will be a good premium. We will start from SAARC countries and eventually go global.

What is your strategy for competing against private insurance companies?
I believe that the regulator should dispense with the current method of tariff formula. In some sectors like fire, insurance companies are in a position to bring down the tariff rate but couldn’t do it as rates are administered by IRDA. At the same time it is alleged that the some of the private companies indulged in unethical practices to walk away with the business, public sector companies cannot do it.

What is the solution?
We are asking for de-tariffing of the premium rate. Some of the sectors like motor third party (MTP), public sector insurance companies are bleeding. There is an underlying need for the private sector to actively enter the area of MTP. There is an urgent need to look into these issues holistically. On account of MTP alone, all the four public sector general insurance companies have incurred losses of over Rs 2000 crore. In fact, we are currently cross-subsidising MTP from other premium. The issue of cross subsidisation should be addressed and policyholders should be allowed a lower rate for better claim experience.

What is the experience in Mediclaim after the introduction of Third Party Administrator (TPA)?
In the last two years, the industry has suddenly witnessed a spurt in the claim ratio, which has gone up to 98% from 78% two years ago. This indicates that there is a nexus between all the concerned parties. At this level, this is again not sustainable. Insurance companies also need to put their houses in order and tighten their belts on TPA.