Excise duty in vehicles segment fades insurers’ hope

The General  Insurance sector which had hoped for a revival of the sales of automobiles in the last quarter on account of higher purchase of motor insurance policies, would likely see a flat period with a excise duty across the vehicles segment thereby affecting the insurance sales, too.

From April to November last year, non-life insurers collected premiums of Rs 23,847.98 crore from the motor insurance segment. Of this, Rs 12539.37 crore came from the own-damage segment while the rest came from the mandatory third party segment.

Motor insurance consists of two segments – own-damage and third party (or TP) cover. While the own-damage covers losses to self during accidents, TP covers liability to a third party caused by a vehicle owner during an accident.