Third-party liability insurance cover a sticky business

The pricing of motor third-party liability insurance cover continues to be regulated in India. The portfolio has been a loss-making one for non-life companies for many years as the prices were not raised in keeping with the increase in tribunal awards to accident victims.

However, in recent years, losses have come down, with Irda revising rates based on claims experience. The losses on businesses which no insurer wants to accept are shared among all companies through a declined pool. ET has more details.

- 8 out of 11 countries (China, japan, South Korea, Indonesia, Taiwan, Thailand, Vietnam, Malaysia) have a maximum cap on mandatory third-party (TP) loss liability.

- Other 2 countries (Australia and Singapore) with unlimited TP liability have deregulated pricing and hence, players can price as per their risk appetite.

- Property loss not covered under mandatory TP insurance in 5 countries (Japan, Indonesia Taiwan, Thailand & Australia).