Page 19 - Insurance Times May 2020

FIRE TARIFF HAS

COME BACK

AGAIN - AS

DETARIFF

UNDERWRITING

PROVED FUTILE

Introduction:
But from the dangerous trend of lucrative discounts being
The Fire Insurance portfolio of all General Insurers in India
was right from the beginning for all time considered as a offered by the insurers, mainly to the corporate clients, in
the cut-throat & unhealthy competition existed in the de-
profit generating assortment. All insurers knew that Fire Line
tariffed regime of Indian General Insurance Sector, the
of Business is always giving the cream of profit, as the moral
or morale hazards are normally absent in the Fire Insurance premium base of the Fire Portfolio thus become a skeleton.
It is a joke prevailed in the market at the backdrop of last
selling and no one considers to burn his own property to
few years' Fire Insurance operations, an insured availing
fetch some financial benefit from his fire insurance policies,
99.999...%, when asked for further discount from the
as there exists a Policy Excess of 5% of the claim amount
subject to minimum of Rs. 10, 000/- or more depending on insurer - the underwriter replied "We are ready to allow
the Sum Insured of the policy, always to be applicable for 100% but that ensures no payment of premium from your
all fire claims (except for the dwellings). So, whatever side - which means - no policy may to be issued. Well, will
amounts are eligible for payments to be made by the you be happy in such situation?"
insurers' under the affected Fire Policies, those basic
Even situation was so bleak, that insurers started accepting
amounts of excess need to be always mandatorily be borne
by the insured in each such claims. 100% discount in Basic Fire Premium along with collection
of full premium on STFI, Earthquake (as add-on cover) perils
- as no discount being applicable for these AOG Perils.
About the author Although in the Fire insurance retail markets, the discounts

allowed by the Indian insurers were relatively low - but the
Anabil Bhattacharya charm of underwriting the Fire Line of Business in so doing,
B.M.E. (Honours), F.I.I.I., simply vanished.
Retired Chief Manager, H.O.
National Insurance Co. Ltd.
Kolkata. Even no satisfactory answer was available from the Secretary
General of General Insurance Council, Mumbai - when that

The Insurance Times, May 2020 19