New Delhi : Motor insurance polices are likely to cost more from November as the Insurance Regulatory and Development Authority of India has hiked the agent commission on such products.
Motor insurance in India are of two types — comprehensive that covers own damage and third party, and the second that covers only third-party damage. The agent commission on own damage part of comprehensive insurance polices has been hiked to 17.5% for four-wheelers and 15.0% for two-wheelers from 10% at present, a senior official at the regulator told Cogencis.
Motor insurance policy constitutes more than 40% of the total premium collected by the general insurance industry. Total motor premium stood at Rs 76 bn in first quarter
For standalone third-party cover, which did not have set commission earlier, the agents will now get 2.5% of annual premium. “Currently, there are no commissions on standalone third party products, but insurance companies typically pay a flat fee of 100-150 rupees to help agents or distributors cover their costs,” the official said. Third-party motor insurance policy is mandatory in India and comprises nearly 55% of the total motor insurance premium collected in Apr-Jun by general insurance industry.
In the first quarter of the current fiscal, general insurance companies collected 138.50 bln rupees by selling motor insurance policies. Of this premium for third party stood at 76.08 bln rupees, while the rest 62.42 bln rupees were from own damage premium. Motor insuranceconstitutes 40% of the total premium collection.