Motor Insurance India has had a shining last quarter as they registered a 22% growth in the topline with a total premium collected being Rs 14,046 crore. This is a direct result of IRDA allowing insurance companies to hike premium on third party cover by 10% for cars and upto 65% for commercial vehicles from April 2011, For the same period last year, the premium collected was Rs 11, 478 crore. The premium collected in the third party cover went up to Rs 2.043 crore compared to Rs 1467 crore (a whopping 39.2% increase).
In India third party insurance is mandatory for all commercial vehicles. Hence another reason for this topline growth can be ascribed to the rising number of new vehicles on the Indian roads. However with the recent hike in the interest rates by RBI, it is reported that demand for cars have dropped and ever since the car manufacturers are introducing attractive schemes to boost sales.
In times of these decreasing motor demands, it remains to be seen whether the motor insurance sector can sustain this growth they achieved this quarter.
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