B.G.PATKI ‘MOTOR’ RISK MANAGEMENT & AUTOMOBILE ACCIDENT TECHNOLOGY CONSULTANT B.G.PATKI

1. B.G.PATKI‘MOTOR’ RISK MANAGEMENT&AUTOMOBILE ACCIDENT TECHNOLOGY CONSULTANTB.G.PATKI

2. MARCH TOWARDS MOTOR-DETARIFF

3. CURRENT SCENARIO VEHICLE POPULATION STATUS OF ‘MOTOR’ OUTG0ES IN OD OUTGOES IN LIABILITY

4. TARIFF ITS HISTORY

5. CONCEPT ALMOST 100 YRS OLD. INSURANCE ASSOSIATION OF INDIA MANY COS. WERE MEMBERS KNOWN AS TARIFF COS.

6. LAID DOWN RULES, RATES, CONDITIONS DISCOUNTS ADD-ON COVERS ETC. HAD TO BE STRICTLY FOLLOWED

7. TARIFF COS. HAD • IDENTITY • CONFIDENCE, FAITH OF THE INSURING PUBLIC SINCE MANY BIG & REPUTED COS WERE MEMBERS. • CONSCIOUS DECISION NOT TO INDULGE IN UNHEALTHY COMPETITION

8. AVOID PRICE WAR SINCE TARIFF REGULATIONS PUT A BAR ON SUCH PRACTICES

9. FORMATION OF TAC AROUND LATE SIXTIES(1969) OUT OF INSURANCE ACT AROSEIMT

10. WHY TARIFF?

11. IN THE INITIAL DAYS OF THE GENERAL INSURANCE IN DEVELOPING COUNTRIES, GLOBALLY DESCIPLINED STRUCTURE OF THE PRODUCT WAS HIGHLY ESSENTIAL IN ABSENCE OF SUCH DESCIPLINE:

12. IN THE EXCITEMENT/ COMPETETION OF PROCURING THE BUSINESS INCOME PRICING COMPONENT IS THE IST VICTIM

13. EVEN RISK PATTERNS, PERILS, CONDITIONS WERE PUT ON BACK BURNER. JUDICIOUS RISK ADOPTION MOST LIKELY WOULD GET THROWN TO WINDS.

14. IN SUCH A SCENARIO DANGER LOOMING OVER THE COS. VIRTUALLY BITING MORE THAN THEY COULD CHEW.

15. RESULT? DANGER OF BANKRUPTCY. WHO ARE THE SUFFERERS?

16. INSURING PUBLIC • SHAREHOLDERS • EMPLOYEES

17. INSURANCE IS BASED ON PRINCIPLE OF PROBABILITY. CONCEPT HAS MAXIMUM RELEVANCE IN MOTOR, MARINE AMONGST OTHER PRODUCTS.

18. MOTOR FACES CONTINEOUS CHALLENGE NOT JUST LIABILITY BUT OD AS WELL OD LOSSES MINOR TO MAJOR TO TOTAL LOSS AND HAPPENING MENACINGLY ON REGULAR BASIS

19. MOTOR MANAGERS MAY NOT TAKE ADEQUATE CARE LEADING TO LOSSES RESULTING IN BANKRUPTCY OR AT LEAST CURB GROWTH IN TARIFF SCENARIO, EXPERTS HAVING OVERVIEW AS WELL AS EXPERTISE CAN

20. PRICE THE PRODUCT MAY BE HIGHER BUT PROTECTING FROM THE DISASTER

21. THIS PROCESS IS CALLED TARIFF

22. TARIFF IS SEEN AS THE PROTECTIVE RING.

23. CONSIDER FROM DAILY LIFE • GARDENING: PLANTING TREES IN BACKYARD • IRON FENCE AROUND FOR SAFEGUARDING/ PROTECTION IN ITS INITIAL YOUNG DAYS

24. VISUALISE WHEN TREE GROWS WHAT NATURALY FOLLOWS? TRUNK OF THE TREE LARGER THAN RAILING RAILING WHICH WAS PUT AROUND FOR PROTECTION

25. NOW IN GROWTH TREE WILL NEITHER BREAK IRON BAND NOR BAND WILL EXPAND BUT WILL START BITING INTO THE TRUNK OF TREE DEFEATING VERY PURPOSE WHY PROTECTIVE FENCE RING WAS PUT IN THE FIRST PLACE

26. WHAT IS THE SOLUTION? REMOVE THE PROTECTION IN TIME AND ALLOW THE TREE TO GROW TO ITS FULL POTENTIAL

27. SAME HOLDS TRUE FOR MOTOR INSURANCE TARIFF

28. REMOVAL OF TARIFF, THE PROTECTIVE FENCE IS EXPECTED TO ALLOW THE EXPECTED EXPONENTIAL GROWTH & BLOSSOM TO ITS FULL POTENTIAL.

29. AFTER ALL, AUTOMOBILE INDUSTRY IS GROWING AT A TREMENDOUS PACE IN INDIA VIS-À-VIS MOTOR INSURANCE

30. NOW THAT THE TREE/ INDUSTRY HAS GROWN—GROWING—BLOSSOMING STAGE REACHED WHEN IT CAN TAKE CARE OF ITSELF WITHOUT ANY PARENTAL PROTECTION

31. THIS PARENTAL PROTECTION NOW NEEDS TO BE WITHDRAWN

32. THIS IN NUTSHELL IS DETARIFF FREE MARKET

33. NOW OVERVIEW PREPARE OURSLVES TO FACE THE NEW CHALLENGE DO IT YOURSELF HENCE PREPARE WORFORCE

34. IRDA CIRCULAR OF SEPT.05 TIME BOUND PROGRAMME FOR PREPARATION. 1-1-07 THE START OF NEW ERA. ‘MOTOR’ EXPECTED IN NEAR FUTURE THEREAFTER

35. EXPERIENCE, RELEVANT FACTORS WILL DIFFER REGIONWISE/ GEOGRAPHICAL ASPECTWISE THIS WILL PLAY A VITAL/ IMPORTANT ROLE

36. FACTORS HAVING DIRECT BEARING/ADVANTAGE ON MOST APPROPRIATE PRICING VIS-À-VIS CONDITIONS TO MAKE THE PORTFOLIO VIABLE/ PROFITABLE

37. PROFIT ANGLE SO FAR NEGLECTED NOW TO BECOME ESSENTIAL TOP PRIORITY

38. TECHNO- MARKETING CONCEPT: e.g. • MASS MARKETING • DISTRIBUTION CHANNEL ALSO TO BE CONSIDERED

39. MARKETING EVEN Dr. PETER DRUCKER HAD SAID THAT COMMERCIAL ORGANISATIONS MUST MAKE PROFIT & HENCE STRATEGIES TO ESSENTIALLY INCLUDE PROFIT ANGLE

40. DETARIFF HAS INDIRECT BENEFIT ALSO • INFLUENCE OF TRANSPORT ORGANISATIONS (WRIT PETITIONS) • MANUFACTURERS’ LOBBY • DEALEARS’ LOBBY • MAY EVEN BE BROKERS’ LOBBY

41. WILL BECOME IRRERELEVANT

42. FLEXIBILITY WILL GET ESTABLISHED SINCE CO.WISE DECISIONS WILL PREVAIL

43. THESE ARE SOME OF THE FEATURES OF THE REMOVAL OF THE TARIFF REGULATIONS

44. IN TARIFF REGIME LITTLE OR NO DISCRETION TO THE COs IN SHORT: TARIFF CAN BE MANAGED BY KIDS FREE MARKET IS FOR “ADULTS ONLY”

45. “ROAD MAP” MANY GUIDING POINTERS HAVE BEEN MADE AVAILABLE

46. ANACHRONISM IN TARIFF PRICING REGIME WILL NOW VANISH

47. AND CENTRALLY ADMINISTERED RATING REGIME WILL GET REPLACED BY COMPANY-SPECIFIC RATES & TERMS FOUNDED ON EXPERTISE AND EXPERIENCE

48. CURRENT SCENARIO :- INADEQUATE & LOPSIDED PRIMIUM FLOWS & HIGH LOSSES IN TPL & OD FREE MARKET RATING SYSTEM WILL REMOVE THESE IMPEDIMENTS

49. LEAKAGES, INFLATED CLAIMS MANAGING CLAIMS COST MORE EFFECTIVELY WILL BECOME THE URGENT NEED FOR UNDERWRITERS

50. DAYS OF ADMINISTERED PRICING OVER MARKET TO BE GIVEN FREE PLAY WITH PROPER REGULATORY MECHANISM TO CONTROL DEVIATION