Motor car Insurance: Third party motor insurance is the new cash cow

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Third party motor insurance, the segment that used to be a drag on insurers for more than a decade, has turned into a money spinner for these firms, thanks to increased premiums and motor safety norms. 

General insurance companies collected Rs 26,523 crore under the third party motor segment in the last financial year while the premium collected under own damage was Rs 23,727 crore, according to the data published by insurance regulator Insurance Regulatory and Development Authority of India (Irda). 

“There are various factors that have played in the increase of the third party pool, including reduction in own damage claims and increase in premium for third party segment,” said Sanjay Datta, head of reinsurance at ICICI Lombard General Insurance. When the third party pool was dismantled in 2011, the four public sector insurance companies were mostly writing these motor insurance policies. The cover had moved to a declined risk pool, which later became insignificant, with regulator intervening in rates.