News & Views
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(Briefing Paper No.3/2007)
Competing insures help cut cost for shipping companies
The Economic Times, Monday, September 01, 2008
Increasing competition among insurance players has helped to reduce the outgoings of Indian ship owners and shipping companies, whose marine bills have reduced drastically over the years. The number of players who offer marine insurance products in the country has doubled from that existed a few years ago, and the resultant competition among them has also pulled down marine insurance premiums to less than half of what used to be before. It was not quite long ago that there were only four players in the marine insurance segment and all of them were government PSUs – New India Insurance (Mumbai), Oriental Insurance (New Delhi), United India Insurance (Chennai) and National Insurance (Kolkata).
With the entry of private insurance companies their number has more than doubled. Of the many players in the private domain ICICI Prudential, IFFCO-Tokyo Marine, Bajaj Alliance, and Reliance Insurance are the four leading players. There are companies like HDFC which are working towards joining the elite group of marine insurance companies.
Since government introduced de-tariff in insurance in April 2005, premium rates have come down. As a result, marine hull premiums have reduced more than 50% over the years. There is also substantial reduction in cargo insurance premiums.