The Hindu : Andhra Pradesh / Hyderabad News : Diversification is key: Rangarajan

Online edition of India's National Newspaper
Friday, Jul 28, 2006

Andhra Pradesh

Andhra Pradesh - Hyderabad

Diversification is key: Rangarajan

Staff Reporter

De-tariffication will trigger a boom in insurance retailing, says IRDA Chairman

WELL DONE: C. Rangarajan, Chairman, Economic Advisory Council, congratulating topper Radhika Krishnan at the convocation of IPGDI in Hyderabad on Thursday as C.S. Rao, Chairman, IIRM, looks on. - Photo: K. Gajendran

HYDERABAD: Insurance sector should pay attention to product innovation, appropriate pricing and speedy settlement of claims, according to C. Rangarajan, Chairman, Economic Advisory Council to Prime Minister.

He said diversification was the only way to reduce average risk. Welcoming free tariff regime, he said regulators must take care to ensure that regulations do not slide into controls. He was speaking to students at the convocation of the second batch of students passing out of Institute of Insurance and Risk Management (IIRM) after finishing the one-year international post-graduate diploma in insurance (IPGDI) here on Thursday.

Chairman of the Insurance Regulatory and Development Authority (IRDA) C.S. Rao said as India readied itself for the second phase of insurance reforms, de-tariffication should not lead to a free-for-all situation and chaos. De-tariffication would trigger a boom in retailing of insurance. "As it happened in banking, companies will come to the doorstep of people selling insurance products," he said. "Everything is free as far as pricing is concerned in the de-tariffied scenario." Asked if de-tariffication would lead to devouring of small companies by big ones, he said it would not happen.

He said it was 10 years of insurance sector reforms in the country. What had been achieved in this period might look small, but the country could achieve political consensus for opening up of the sector and bringing in foreign direct investment into the sector.

Diplomas presented

Dr. Rangarajan gave away diplomas and presented a Rs. 5,000 cash award and merit certificate to Radhika Krishnan, the topper who also got a 1,000-pound sterling cash award from Lloyd's, London.

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