Fire insurance premium may rise after 1 July as companies may revise prices of their products
occupancies in insurance sector refer to products, a sector or class of asset and different occupancies carry different risk of loss
Kolkata: The premium for fire insurance may increase from 1 July, as insurance companies may revise prices of their products based on the reference rates prepared by the Insurance Information Bureau, an official said on Sunday.
Promoted by insurance regulator, Insurance Regulatory Development Authority of India, the Insurance Information Bureau of India prepared burning cost 'referral' rates varying across different occupancies and these rates are applicable from 1 July, according to Bureau's CEO Kunnel Prem.
"Insurance Information Bureau provides data and referral rates for different types of occupancies. Based on the data, insurance companies are expected to revise the rates, or companies having better experience in an occupancy may opt for their rate. However, there could be an increase in fire insurance premium," Assocham's Insurance Council Chairman and National Insurance's General Manager K.B. Vijay Srinivas told IANS.
However, it is not mandatory for the insurance companies to adhere to the reference rates provided by the bureau, he said.
According to officials, occupancies in insurance sector refer to products, a sector or class of asset and different occupancies carry different risk of loss, officials said.
The objective of preparing the reference rates is burning cost should be in proportion to premium so that a company does not make loss.
According to the revised data, the number of occupancies has been increased from 85-90 to 101 as new industries have come up, Prem said.