Risk assessment process will gain more importance in a post detariffed regime. The various kinds of risks will be evaluated as per the newly formed underwriting guidelines of each respective insurer for a particular class of business. A dedicated risk management team with experienced professionals from different industries like, power plants, petrochemical, aviation, shipping etc will form a paramount role in deciding the quality of risk to be insured. A strong IT system with judicious spread of business would be the backbone of making plans and strategies happen.

Will it be much different than that off the system that is being adopted?

It will not be much different for ITGI as we already have dedicated risk management team which work towards assessing the quality of risks with IT support.

How do you define a bad risk and good risk?

Quality of risk can be determined by a number of factors depending upon different class of business which will include its past experience, adherence to safety norms, risk exposure, quality of housekeeping, professional management etc.

What are the factors or changes you want to take into account while pricing a product?

Different class of products will be priced on different factors ranging form the past experience, risk exposure in terms of usage, geography, safety conditions etc.

Will you completely eliminate the bad risks from your portfolio or accept it with premium overloading?

A customer has always been a priority for ITGI and we will continue with our policy of working together with the customer to assess the factors of bad risk and ways and means to improve the same. Discount and overloading will depend upon the various kinds of risk factors and adherence to safety norms.

What are the incentives for the good risks?

There will be many incentives for a good risk depending upon the class of business like, discounts, no claim bonus, added coverage etc.

Do you expect post-detariffing reinsurance treble or pay higher premium which can be passed onto the customers?

There will be some impact on the way reinsurers look at risks in a detarrifed market. In case of small risks, there will not be much impact as the companies are now large enough to underwrite such risks in their automatic capacities. However in case of large risks the pressure will be on higher deductibles from the RI market. There would be lower premiums available for reinsurance support in the initial years, however as the market matures the prices will stabilize over a period of time.

What kind of new investment in terms of funds and manpower you had to make?

We have a dedicated detariffing and new product development team of actuaries and industry veterans and we are preparing ourselves as per the road map issued by the Regulator. Initially as per the experience of international markets there could be drop in premium rates which would put pressure on the optimum utilization of the policyholder's fund to generate additional revenue with controlled risk association of investments. This would additional manpower both in terms of professionalism & quantum for controlling the investment functions of the company.

Do you expect your solvency margin to fluctuate frequently? Will you go for ratings now?

Reduced margins would result in reduced surplus which would impact the solvency margin. The fluctuations in solvency margins will be continued to be monitored regularly & systematically. Ratings in detarriff scenario would assist in building the brand and also the confidence of the insured & reinsurers in the strength of the company.