Insurers Strengthen Measures Against Motor Third-Party Fraud
Non-life insurers are increasing efforts to control motor third-party fraud as rising claim payouts, higher court awards and uninsured vehicles continue to put pressure on the segment.
Go Digit General Insurance recently obtained an order from the Madras High Court for setting up district-level special investigation teams across Tamil Nadu to examine suspected fraudulent motor claims. The investigation will cover cases involving fake accidents, forged policies, false medical documents, fabricated injuries and misrepresentation.
The court has also directed authorities to collect supporting evidence, including call records, and take action against individuals involved in fraudulent activities or officials found negligent in preventing such practices.
Industry executives said motor third-party fraud is becoming a wider concern. Krishnamoorthy Rao, MD and CEO, Generali Central Insurance, said the issue is adding pressure to a segment already affected by increasing compensation awards and uninsured vehicles.
Insurers are also reassessing provisions following a Supreme Court decision introducing compensation under loss of domestic care, linked to a monthly income assumption of Rs. 30,000 with periodic adjustments.
Non-Life Insurance Premium Growth Slows to 6% in July
Growth in non-life insurance premiums moderated significantly in July 2026, with gross direct premium underwritten increasing 5.7% year-on-year compared with nearly 16% growth recorded in June.
According to data released by the General Insurance Council, total premium collections across multi-line general insurers, standalone health insurers and specialised public sector insurers reached Rs. 31,397.6 crore during July.
Multi-line general insurers recorded 7.7% growth with premiums of Rs. 26,335.3 crore, while standalone health insurers continued strong momentum with 28.8% growth to Rs. 4,666 crore. Specialised public sector insurers witnessed a decline of more than 75% in premium collections.
Among major insurers, New India Assurance reported 4.5% growth in premiums to Rs. 4,322.66 crore, while ICICI Lombard General Insurance recorded a 3.1% decline to Rs. 2,405.7 crore.
The slowdown follows stronger growth in June, when industry premiums increased 15.9% year-on-year, indicating moderation in premium expansion momentum during July.
GIC Re Reports 10% Growth in Q1 Profit
General Insurance Corporation of India (GIC Re) reported a 10% year-on-year increase in standalone net profit for the first quarter of FY27, supported by higher other income, lower claims payments and reversal of earlier premium deficiency provisions.
The reinsurer posted a net profit of Rs. 1,922 crore compared with Rs. 1,752 crore in the same quarter of the previous year.
Net premium earned remained almost unchanged at Rs. 11,081 crore during the quarter. Investment income declined slightly to Rs. 2,171 crore, while other income increased substantially.
GIC Re recorded a reversal of Rs. 53.30 crore in previously recognised premium deficiency provisions, compared with a provision created in the previous year’s quarter.
Claims paid declined by around 8% to Rs. 7,287 crore, helping reduce underwriting losses to Rs. 801 crore from Rs. 910 crore a year earlier.
The company’s investment portfolio increased marginally to Rs. 1,48,378 crore, reflecting continued strength in its financial position.
Bajaj General Insurance Partners Swiss Re for Commercial Insurance Expansion
Bajaj General Insurance has entered into a memorandum of understanding with Swiss Re Corporate Solutions to develop commercial insurance solutions in India.
The partnership aims to combine Bajaj General Insurance’s market presence with Swiss Re’s expertise in structured risk solutions and commercial underwriting. The collaboration will focus on sectors including technology, manufacturing and other high-growth industries.
Subject to regulatory approvals and final agreements, both companies will utilise Swiss Re’s International Programs platform to design insurance solutions for Indian multinational companies expanding overseas and global businesses investing in India.
Swiss Re Corporate Solutions brings capabilities in property insurance, specialty insurance lines, credit and surety solutions, and alternative risk transfer products such as captive and parametric insurance.
The partnership comes amid increasing demand for sophisticated commercial insurance solutions as Indian businesses expand globally and manage more complex risks.
Ivan Gonzalez, Chief Executive Officer of Swiss Re Corporate Solutions, said: “India is the fastest-growing major commercial insurance market in the world, and we are exploring new ways to better serve corporate clients in this dynamic market with Bajaj General Insurance.”
SC: Functional Disability to Decide Road Accident Compensation
The Supreme Court has ruled that functional disability, rather than only doctor-certified medical disability, should determine compensation in road accident cases. The court awarded Rs. 83.3 lakh to a minor who suffered severe spinal cord and neurological injuries in an accident at six months of age.
Although doctors assessed the child’s medical disability at 90%, the bench considered her functional disability to be 100% because the injuries had completely affected her future earning capacity and independence.
The court observed that physical disability and functional disability can differ significantly depending on the circumstances of each case. A lower level of physical impairment may still result in complete loss of earning ability.
The judgment highlighted that child victims with permanent disabilities require a realistic and humane approach while calculating compensation under the Motor Vehicles Act. The decision reinforces that courts must consider long-term life impact, dependency and earning potential while determining damages.
56% Vehicles on Indian Roads Uninsured, Supreme Court Suggests Strict Measures
The Supreme Court has raised concerns over the large number of uninsured vehicles operating on Indian roads and suggested stricter measures to improve compliance with mandatory third-party motor insurance rules.
The court noted that around 56% of registered vehicles, or approximately 16.5 crore vehicles out of 30.4 crore registered vehicles, remain uninsured. It observed that this situation defeats the purpose of compulsory insurance under the Motor Vehicles Act and leaves accident victims facing difficulties in obtaining compensation.
The bench suggested linking vehicle fuel availability with valid insurance status as a possible solution. It also directed that Automatic Number Plate Recognition cameras should be integrated with Insurance Information Bureau and VAHAN databases to identify uninsured vehicles and issue automatic challans.
State traffic police were also advised to use digital systems to verify insurance status during enforcement activities. The move aims to improve insurance compliance and strengthen protection for road accident victims.
Supreme Court Extends Third-Party Insurance Period for New Vehicles
The Supreme Court has extended the mandatory third-party motor insurance period for newly purchased vehicles, requiring four years of coverage for new cars and six years for new two-wheelers.
Earlier, buyers were required to purchase three-year third-party insurance for cars and five-year cover for two-wheelers at the time of purchase or registration. The court increased the period by one year to improve road safety and ensure greater financial protection for accident victims.
The decision was issued while hearing a motor accident compensation case involving an insurer’s liability dispute. The court dismissed the insurer’s appeal and directed payment of compensation to the victim’s family, stating that courts should not adopt an overly technical approach in accident claims.
The bench also ordered integration of Automatic Number Plate Recognition cameras with insurance and vehicle registration databases to identify uninsured vehicles and enable real-time verification.
Marine War-Risk Premiums Rise Up to 200% Amid West Asia Tensions
Marine war-risk insurance premiums on shipping routes affected by West Asian tensions have increased sharply, with some high-risk routes witnessing premium rises of up to 200%.
Industry brokers said renewed military activities have reversed earlier reductions in war-risk pricing after temporary improvements in regional security conditions. Ships are increasingly avoiding the Red Sea due to security concerns around the Bab-el-Mandeb Strait, forcing vessels to take longer routes around the Cape of Good Hope.
Higher voyage times, increased fuel costs and growing security risks are putting additional pressure on shipping operators. Reinsurers have also become more cautious, resulting in higher pricing and tighter underwriting conditions.
The Bharat Maritime Insurance Pool, a $1.5 billion sovereign-backed initiative managed by GIC Re, has not changed its rates so far despite reporting its first loss. The pool provides war-risk coverage for cargo, hull and machinery, and protection and indemnity risks for Indian shipowners.
Vehicle Scrappage Highest in Uttar Pradesh with 2 Lakh Units Removed
Uttar Pradesh has emerged as the leading state in vehicle scrappage after the implementation of the Central government’s Vehicle Scrappage Policy. More than 1.85 lakh private vehicles and around 10,000 government vehicles have been scrapped through authorised scrapping centres in the state till June 30, 2026.
The state currently has 101 Registered Vehicle Scrapping Facilities, of which 50 are operational. The entire scrapping process is managed digitally through the Vehicle-Scrap Portal and VAHAN system under the Ministry of Road Transport and Highways.
Across India, around 4.20 lakh vehicles have been scrapped through authorised facilities since August 2022. Uttar Pradesh has the highest number of operational facilities, followed by Haryana with around 25 centres and Gujarat and Maharashtra with 10 centres each.
The policy aims to remove old and unfit vehicles from roads, improve road safety, reduce pollution and encourage vehicle owners to shift towards newer and safer vehicles.
Insurers Expect Rs. 5,000 Crore Claims from Gujarat Floods
Insurers are expecting nearly Rs. 5,000 crore worth of claims from flood-affected areas of Gujarat, with property insurance expected to account for the majority of losses.
Surat, Navsari and Valsad were among the worst-affected districts, while cities including Ahmedabad, Vadodara and Rajkot also witnessed severe waterlogging and disruption. Thousands of homes and infrastructure facilities were affected, resulting in significant property damage.
Industry estimates suggest property claims could exceed Rs. 4,000 crore, with motor insurance claims expected to emerge gradually. The claims are higher compared with the 2024 Gujarat floods, which resulted in losses of around Rs. 1,500 crore to Rs. 2,000 crore.
Despite the expected claims, insurers do not anticipate major premium increases in property insurance due to strong reinsurance support and existing market competition. IRDAI has advised insurers to maintain prudent underwriting and sustainable pricing.
New Vehicles May Require Vehicle-to-Vehicle Communication from October 2028
New vehicles manufactured from October 2028 may be required to have vehicle-to-vehicle (V2V) communication systems under proposed guidelines issued by the Ministry of Road Transport and Highways.
The draft amendment to the Central Motor Vehicle Rules, 1989 proposes mandatory installation of V2V communication systems for category L, M and N vehicles from October 1, 2028. These systems will have to comply with Automotive Industry Standard AIS-230, which specifies technical, functional, security and performance requirements.
The technology enables vehicles to exchange information with each other, improving road safety by supporting better traffic coordination and accident prevention.
The government has proposed that vehicles equipped with V2V systems from October 2027 should follow AIS-230 requirements, making compliance optional before the mandatory phase begins.
Stakeholders have been invited to submit comments before final guidelines are issued.
ICICI Lombard Introduces Motor Cyber Insurance for Connected Cars
ICICI Lombard has introduced a motor cyber insurance cover designed for digitally connected vehicles, addressing growing cybersecurity risks in modern automobiles.
Connected cars increasingly depend on software, smartphones, navigation systems, digital wallets and internet-based features, creating potential exposure to cyberattacks. The new cover protects policyholders against risks including unauthorised access, vehicle hacking, cyber extortion, software damage and financial losses caused through connected vehicle systems.
The optional rider also provides coverage for situations where hackers disable vehicles or demand ransom to restore access. It includes expenses related to restoring vehicle software and reinstalling systems affected by cyber incidents.
The product reflects the changing nature of motor risks as vehicles become more technology-driven. Electric vehicles and modern fuel-powered vehicles with advanced connectivity features require additional protection beyond traditional motor insurance coverage.
The initiative highlights the growing importance of cyber risk management in the automotive insurance sector.
