High Claims and Controlled Tariff Structure in Motor Insurance in India
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Case Code: INS027 Case Length: 03 Pages Period: 2003 Pub Date: 2003 Teaching Note: Available |
Price: Rs.100 Organization: Varied Industry: Insurance Countries: India Themes: - |
Abstract Case Intro
Chari Finance Ltd is one of the leading non-banking financial companies in Southern India. With liberalization of the insurance sector, there were opportunities galore and like most organizations, Chari Finance Ltd, also wanted to enter the field of non-life insurance.
The top management of Chari Finance Ltd planned to focus on the motor insurance business. They decided to hold a meeting to study the feasibility of the business idea and to know the ground realities existing in the market. In the meeting, the chairman of the company, Meenai Subramanyam (Subramanyam), announced, "As per my knowledge, the environment in the motor insurance sector is not conducive."
"The sector has been recently opened up to private players. How can you conclude that the environment is not conducive even before entering it?" asked Kallupatti Kartekeyan (Kartekeyan), Vice-President (Sales).
Subramanyam replied, "At present, all the private sector insurance companies are pulling out of the motor insurance sector. In a situation like this, how can we think of entering such a market?" "But players like Tata-AIG, ICICI-Lombard and Bajaj Allianz are still there in the market. If the business environment is not congenial, why are these players continuing in the business?" asked Kartekeyan...
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