ICICI Lombard stock rose 5% after reports emerged that the Ministry of Road Transport and Highways is reviewing a proposal to increase motor third-party (TP) insurance premiums for FY26. As of 1:43 PM, the shares were trading 5.58% higher at Rs 1,982.20.
According to a CNBC-TV18 exclusive, the Insurance Regulatory and Development Authority of India (IRDAI) has recommended an average increase of 18% in motor TP premiums, with suggestions of a 20–25% hike for certain vehicle categories.
Motor third-party insurance is a mandatory policy for all vehicle owners in India. However, premiums have remained unchanged for the past four years despite rising claims and mounting losses for insurers. In FY25, motor TP insurance accounted for nearly 60% of total motor insurance premiums and 19% of the overall general insurance premium base.
Sources told CNBC-TV18 that the Road Ministry is expected to take a final decision within the next two to three weeks. A draft circular outlining the revised premiums will be issued once the ministry grants approval. Analysts suggest that a 20% hike in TP premiums could improve insurers’ combined ratio by around 4–5%, offering some relief to the sector.
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