Insurance Regulatory and Development Authority of India (IRDAI) chairman SC Khuntia on Friday cautioned insurers against indulging in predatory pricing, saying it is not a sustainable model while citing examples of airline and telecom sectors. Highlighting that the insurance industry is different from other business, he said if an insurer fails, it has bearing on customers as well.
“I would like to give a word of caution here. Though your (insurance brokers) share is very high in group health insurance, the loss ratio in group health insurance is also very high. Probably, it is not very sustainable at present,” he said at an event organised by Insurance Brokers Association of India here.
“So the insurance companies, intermediaries and policyholders need to unite to create a sustainable atmosphere. In other industries if there is unfair competition, the industry suffers but the clientele don’t suffer. While this has happened in airlines and telecom industries but we cannot afford that kind of a situation in the insurance industry because insurance is an industry for protection,” he said.
“So if the industry suffers, then clientele also suffers. And as a regulator we would not like that to happen. One should not overcharge and also not undercharge,” he said.