The insurance regulator has warned general insurers against aggressive underpricing in the fire insurance segment after receiving complaints of discounts of up to 99% on large industrial risks, saying such pricing threatens insurers' financial health and underwriting discipline, according to an Economic Times report on July 24.
The warning comes on the heels of a sharp slowdown in fire insurance premiums. Industry fire premiums fell in Q1 FY27 to Rs 8,087 crore from Rs 11,206 crore a year ago. The decline came after premiums rose to Rs 27,432 crore in FY26 from Rs 24,188 crore a year earlier, with public sector insurers posting 19.93% growth and private insurers growing 9.9%.
IRDAI said pricing for large industrial and commercial fire risks should be based on sound actuarial principles as these are low-frequency but high-severity risks, where a single claim may be multiples of the premium collected. Industry experts warned that unsustainable premium levels put claims in jeopardy, as insurers ultimately pay claims from premiums collected.
Source: Economic Times (July 24, 2026)