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| By Subhojit Goswami |
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Monday, October 26, 2009 (15:50:20) |
| Tags : Business, Insurance, PSU |
PSU Insurance companies struggle to pay Rs 4,000 crore every year |
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| Mumbai: Insurance companies are having a tough time doling out accident insurance claims o the victims' family. The rising cases of highway accidents have now become a matter of concern not only for the Indian government, but also for PSU insurance firms, who reportedly pay Rs 4,000cr every year since 2007 to accident victims.
While the estimated earning of the insurance firms in the form of premium from the policy holders was a meagre Rs 15 lakh, the payouts were huge. This is also due to low premium for third party insurance policies.
During the last three financial years the public sector insurance firms have doled out Rs 12,000 crore in compensation to road accident victims. That is not all. Reports say, the insurance companies settle about one lakh cases every year and over 11 lakh claims are still pending. It is to be noted that public sector dominates the general insurance market with private firms controlling 40% of the total market.
Acording to Mahendra Durve, president of the All India Institute of Insurance Surveyors, the insurance companies are doubly in trouble since they are not getting enough in their coffer as 70% of vehicle owners don't buy insurance policies. On the flip side compensation claims are rising everyday.
About 40,000 people are killed in road accidents every year in India and around one and a half lakh are injured. MACT orders insurance firms to make payments under the solatium scheme, which was introduced by the central government in 1989. |
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