Performance Measurement Of Public Sector Insurance Units After De-Tariffication
Sikidar, Dr. Sujit
- Publisher: Journal Of Business Management & Social Sciences Research
Journal Of Business Management & Social Sciences Research
(issn: 2319-5614, eissn: 2319-5614)
Business Management; Financial Management | insurer, insurance, IRDA, de-tariffication.
Insurance sector in India was privatised to publicise insurance products. After privatisation of this industry in India in the year 2000, the next important step taken in the general insurance industry was the removal of tariffs on the non-life insurance products with effect from January1, 2007. The introduction of the free price regime has provided an impetus to the non-life sector. Before the introduction of de-tariffication almost 70% of the business of the non-life sector was driven by various tariffs prescribed by the Tariff Advisory Committee (TAC). The TAC was established under the Insurance Act, 1938, to control and regulate the rates, terms, conditions of general insurance business. TAC has been playing a significant role to specify the tariffs for the product offered by the various insurers in India. Withdrawal of the administered price mechanism from January 1, 2007 has led insurers to design new and innovative suitable products to sustain in the competitive market. The public sector insurance companies enjoyed the monopoly status as a result they lacked flexibility and were not much concerned with profitability. This resulted in erosion of underwriting skills and income of the public sector insurance companies.
So, the present study is an attempt to examine the growth and performance of the public sector insurance companies operating in India in the competitive scenario