Liability premiums are growing faster, next only to those of motor and health, in the detariffed scenario. Yet, only a few insurers are aware of the growing potential and the profit margin that liability insurance offers. The analysis of the premium trends, insurer-wise, shows important gaps in the marketing goals and strategies of the insurers. This article seeks to clear the air for insurers to realize the enormous growth potential in this business.

Non-life insurers in India do not seem to be fully aware of the significance of the growing potential for Liability Insurance in the detariffed scenario. It is a portfolio segment that has been growing faster, next only to motor and health segment. Though the liability premiums currently form only about 2% of the total market gross premiums of about Rs. 30,000 cr, the accretion in premium in 2006-07, which was about Rs. 67 cr grew to about Rs. 120 cr in 2007-08. The private sector players are the dominant ones, who have led the hunt for liability premiums in the post-detariffed scenario.

The claims experience on their earned premiums on the liability portfolio is less than 50%; and insurers have also earned positive net commissions on the reinsurance placements. Despite such positive profitable trends, the insurer community has not targeted the liability portfolio, as a growth portfolio. Is it their market lethargy, due in part to their past historical attitudes towards selling only insurance covers, which are demanded by the consumers that continues to dominate their current marketing behavior?

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