Seen in the Economic Times:
MUMBAI: Property insurance rates fell by as much as 75-80% on the first day of free pricing in the general insurance market. Non-life insurance companies have started quoting rates aggressively with all price controls out of non-life sector.
The new regime has brought to centrestage the broking community who, until now, played a small role. By helping corporates get the best deals, brokers have driven down the price for medium- and large-sized companies.
A couple of thoughts come to mind.
On one hand, this is an entertaining bit of news to keep in the back pocket for the next time a consumer advocate demands increased insurance rate regulation due to allegations of price gouging by the industry. Free competition leads to reduced prices; whodathunkit?
On the other hand, the idea of such sizable price discounting would lead me to be concerned about whether these changes are reasonable, or true nuttiness and an absence of pricing discipline in a quest to buy market share.
Fortunately, I don’t work work with a business that writes much property insurance in India, or else I’d be reaching for a map of Indian catastrophe risks and some Pepto.