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United India to take up motor detariffing with regulator

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Mr K. Garg (left), CMD, United India Insurance Co Ltd, and Mr Pravin Kumar Tayal, Chairman, Bank of Rajasthan, at a press conference in Mumbai on Friday. - - Paul Noronha

Mumbai , Oct 7

UNITED India Insurance will take up the issue of detarrifing of the motor portfolio along with the other tarrifed lines like fire and engineering with the Insurance Regulatory and Development Authority (IRDA), said Mr M.K. Garg, Chairman-cum-Managing Director, United India Insurance.

Currently, the roadmap laid out by IRDA for detarrifing by December 2006 excludes motor insurance, which accounts for 40 per cent of the business of general insurance industry.

Mr Garg said that the detarrifing of the fire portfolio could result in a drop in premium as well as commission from reinsurance companies.

"Motor insurance is a bleeding portfolio which is already having an impact on our balance sheets. Detarrifing the motor portfolio would help in reducing the losses to a certain extent", he said.

Speaking at the inking of a bancassurance tie-up between the Bank of Rajasthan and United India Insurance, Mr Garg said that the company was preparing to enter the detarrifed mode by improving connectivity between its branch offices.

"Data is extremely critical for functioning in the detarrifed phase. By March 2006, we hope to achieve connectivity between all our branches, so that data can be collected and we are able to arrive at claim ratios", he said.

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