State-run auto insurance providers are fast losing ground to private players and their market share could be under pressure unless PSUs change their strategy, says a JD Power study.
According to the study, ICICI Lombard ranked first in customer satisfaction index of auto insurance business in the country. The second and third slots are taken by Oriental Insurance Co and National Insurance Co, respectively.
"As the market has been liberalised new players are coming in. Customers are now getting similar or even better services from private players," J D Power Asia Pacific senior director (India) Mohit Arora told PTI.
He said the average age of auto buyers has come down to 35 years from 39 years in the last seven years, which has changed the customers' preferences.
"Speed of response is very important. PSUs have not been able to understand the market response. Unless they change their mindset, PSUs' market share will be under pressure," Arora said.
He said the state-run auto insurers enjoyed about 67 per cent market share in 2007-08.
"Although the final report on auto insurance by IRDA (Insurance Regulatory and Development Authority) has not been published, we are expecting the PSUs' share to come down by 6-10 per cent for 2008-09," he added.
The other two state-run firms in the business -- New India Assurance and United India Insurance -- have found their berths at the fourth and seventh places, respectively.
The rankings were based on criteria like interaction with the provider, product and policy offerings, purchase and renewal process, claims experience and value of premium.
The study said over 80 per cent of the policy holders did not file a single insurance claim with their providers. It also said about 90 per cent of the policies were renewed.
"Greater amount of financial oversight and global norms are going to be implemented in the Indian insurance business, in line with the rules in the West, as more and more foreign insurance companies venture into the country," Arora said.
Besides, J D Power is conducting an internal study on comparative service standards between Indian and the US auto dealers.
"We have so far found that car buyers in India are more evolved in terms of expectations. Providers need to provide good service here at far more affordable rates than in the US," Arora said.
J D Power is also planning to venture into more areas including banking and telecom sectors.
"We are doing a pilot study for banking sector ratings and the first full-fledged report will come next year. We are also looking at the telecom sector and will do the pilot study in the coming months," Arora said.
