Page 18 - Insurance Times April 2022

Consolation Prize Winner : Technical Paper Writing Contest Cover Story

MOTOR

INSURANCE – IN

THE MIDST OF

TECHNOLOGY

DISRUPTION

Motor insurance in it, the motor line of business contributed the most. Even
Though the origin of insurance is traced back to marine (sea though the other lines of business mainly medical and crop
trade) and fire but from the middle of the 20th century, the picked up a lot in recent past but the motor continues to be
motor has been dominating the business portfolio for the the biggest line of business contributing around 40% of the
non-life insurance segment. For developing countries gross direct premium in India. The size of motor premiums
especially, where the insurance activities are restricted compared with other classes of business usually serves as an
because of the narrow base of the modern economy or indicator of the stage of development of the insurance
because of the lack of insurance awareness, motor business market. The compulsion of having insurance cover for the
generally ranks first or second as a source of premiums. Post- motor vehicle plying on road helps in having a higher
liberalisation, the size of the business grew considerably and penetration level due to the fear of penalty etc. From the
standpoint of insurance intermediaries, who are the link
About the author between, the public and the insurers, motor insurance

represents the bulk of the business canvassed by them.
Aditya Ojha
Student, Dr. Akhilesh Das Gupta
Institute of Technology & A salient feature of motor insurance is that it normally does
Management not lend itself to proportional reinsurance. Only heavy claims
require such type of reinsurance cover, referred to as “Excess
of Loss", under which the ceding company decides what
Prof. Manoj Kumar Pandey quantity it is prepared to retain for its account on each and
Faculty every loss before reinsurers become interested. The bulk of
BIMTECH. motor premiums become the main investment resource for
the insurers. The constitution of motor funds for the reserve
purposes and the investment of these funds function as a

18 The Insurance Times, April 2022