India: Insurers ask for premium increase to cover govt accident plan
Source: Asia Insurance Review | Apr 2018
Insurance companies, mainly government-run insurers, are losing money on the Prime Minister’s accident insurance scheme, Pradhan Mantri Suraksha Bima Yojana (PMSBY), with losses of 80-100%.
To cope with the losses, insurers are asking for an increase in the premium for the plan which provides cover of INR200,000 (US$3,078) to a policyholder. They seek an increase from INR12 per year to INR20-30, reports Financial Express. This hike though may not be enough since similar insurance sold by these insurance companies can cost up to INR80 for a similar cover albeit for individuals, and around INR45-50 for group insurance.
A total of 134 million persons have purchased a PMSBY plan since it was introduced in May 2015. State-owned general insurers together command a PMSBY market share of 70-75%.
“The government had said that a premium rate revision would be reviewed after three years,” said a senior official of a leading insurance company. A hike in premium rates would provide some relief to insurers, he said. A