Fire insurance premiums fall 28% in Q1 amid deep discounting

Mumbai: Premiums under the fire insurance segment fell 28% in the first four months of the financial year to ₹10,062 crore in April-July, compared with ₹14,063 crore a year earlier, industry data from the General Insurance Council showed, as aggressive discounting of large industrial risks weighed on premium growth.

"Aggressive pricing has increased pressure on insurers competing for large corporate accounts," said a CEO of a large general insurance company.

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The Insurance Regulatory and Development Authority of India has received complaints of discounts of as much as 99% on large industrial fire risks, raising concerns over insurers' financial health and underwriting discipline.

In a communication to managing directors and chief executive officers, the regulator said pricing for large industrial and commercial fire risks should be based on sound actuarial principles, as these are low-frequency but high-severity risks where a single claim may be many times the premium collected.

The impact was visible among large insurers. New India Assurance reported ₹1,681 crore in fire premiums in the period, down from ₹2,241 crore a year earlier. Listed players like ICICI Lombard reported ₹1,248 crore against ₹1,815 crore, while Go Digit brought down fire premium to ₹223 crore down from ₹413 crore.