Gadkari urges insurance companies to focus on road safety, not just on premium

NEW DELHI: Transport minister Nitin Gadkari on Friday said that insurance companies in India, like in the developed nations, should take initiative to make roads safer by spending a part of the “hefty” premium they charge, which only benefit them with fewer claims of compensation.
“I am unhappy with insurance companies.... they charge hefty premiums but make no contribution to road safety ...Automobile manufactures have huge profit margins... I don’t buy this hypocrisy,” the minister said while addressing NGOs as a part of the government’s week-long road safety campaign.
Gadkari also blamed “people with vested interests” for coming in the way of the passage of the Motor Vehicles Amendments Bill in Parliament, an obvious reference to the regional transport officials (RTOs) in states. The RTOs’ lobby in the south had held a meeting with ministers from southern states after which some of the states had put objections to certain amendments.
The bill proposes automated system of driving tests, issuance of licence and online system of giving permits besides registration of vehicles at the dealers’ end.
Insurance firms, however, said they have been doing their bit for road safety. “Reduction in deaths and injuries will have direct impact on the insurance premium, which will fall and the benefit will be passed to the insurers,” said an official of a public sector insurance firm.
K G Krishnamoorthy Rao, MD and CEO of Future Generali Insurance said, “We don’t know what the expectations are from insurance companies. Insurance companies are paying out compensation to accident victims in excess of the premium they receive so there is no margin. Also there is no enforcement of existing rules.”
According to Bhargav Dasgupta, MD and CEO of ICICI Lombard General Insurance, the company has been running campaigns on road safety as part of the corporate social responsibility budget. This included an awareness campaign in seven cities on the risks of having small children ride pillion. The company has distributed 50,000 child helmets.