Motor insurance provisions are underestimated

A big surprise: Indian insurers will sustain losses three times as high as the profits posted a year ago. This bad news is due to the revaluation of the provisions of the motor third party liability insurance. The adjustment is comprised between 25 billion INR (555 million USD) and 35 billion INR (777 million USD) for the fiscal year 2010-2011 ending March 31.
The profits reported last year amounted to12.05 billion INR (267 million USD). With motor third party liability tariffs being monitored, the authorities have proposed a rate increase going from 10% for private vehicles to 80% for commercial vehicles.