The Insurance Information Bureau is a body to analyzes insurance data in India. One of the objectives of IIB is:
“Ensure data is available to various market players, researchers, policyholders, and common public for real-time decision making”.
The latest report on Fire Insurance available on the website pertains to FY 2019-20.
One of the tables from the report is shown below:
As per this report, the incurred claims ratio for fire in 2019-20 IS 154%. Residential, which is normally expected to have very low loss ratios is shown as having a loss ratio of 141%. Also, Loss frequency for residential is 0.44% meaning that one in every 225 policies (or risks) has a claim. Claim frequency for Utilities is 7.53%. This means one in every 13 policies (or risks) has a claim.
Further, the report says “Nearly 17 claims in Dwellings Segment (of Incurred amount INR 5Cr & above) are causing steep hike in ICR%”.
Is it a fact that 17 dwellings in one year had claims above Rs 5 crores?
As per the IRDAI annual report, the incurred claim ratio for fire in 2019-20 is 78%. Half of what IIB says is the loss ratio for that year.
Is IIB analysis reliable? Is this the data used by the Insurance industry to make pricing decisions? Even, Reinsurers used to consider IIB rates as highly reliable numbers and used these rates as minimum rates in their treaties.
A sincere request to IIB to clarify the following:
- Which are the 17 dwellings in India that had such massive fires and never reported in the news?
- How can any fire insurance work if the claim frequency is 7.5%?
- Why is the ICR of IRDAI annual reports not matching with that of IIB?
- Is Dwelling loss ratio and frequency so bad?
Finally, can various bodies rely on their data to make real-time decisions? How can anyone make real-time decisions if, in 2024, the latest report available is for 2019-20?
