NON-LIFE SECTOR IN INDIA FACES PROBLEMS SAYS S&P

The non-life sector in India faces several problems, but the worst of these could be alleviated by detariffing, according to a report* released by rating agency Standard & Poor’s (S&P) yesterday. S&P director Ritesh Maheshwari said that underwriting performance in the sector was weak, partly because of huge losses in the tariffed motor sector, which accounts for 40% of premiums. He said that complete detarriffing, proposed to begin in January next year, would improve the sector’s prospects, but Mr Maheshwari said that he feared a delay in its implementation. With penetration of just 0.65% of gross domestic product, S&P noted that penetration rates were among the lowest in Asia. In addition, “the country’s susceptibility to natural catastrophes and its huge population base of 1.1bn hints towards the growth prospects that are possible once this sector is reformed and restructured”. *Asia-Pacific Insurance Outlook 2006-07