Four general insurance companies — Future Generali India Insurance, Iffco-Tokio General Insurance, Reliance General Insurance and ICICI Lombard General Insurance — are outsourcing part of their claims management services to Delhi-based Innovation Auto Risk Management Services (IARMS).

This company specialises in claims management.

“Only surveys pertaining to damage of vehicles have been outsourced to IARMS as Insurance Regulatory Development Authority (Irda) does not allow complete outsourcing,” Deepak Sood, chief executive officer of Future Generali Insurance, said .

Globally, claims management business includes claims intimation, claims assessment, repairs and service assessment and invoice management to claims. Though global insurance firms outsource their claims management business to third party operators, Indian companies are still not comfortable in doing so. Shashwat Sharma, director of KPMG, said the total claims management business is 5-10 per cent of the total motor claims. “The business will grow with more need for tighter control over claims,” According to Sharma, the motor insurance industry stands at Rs 12,000 crore, out of which claims are worth Rs 7,000 crore.

According to Manu Mehta, commercial-director of Innovation Auto Risk Management Services (IARMS), motor claims have been growing with the increasing penetration of the insurance sector. “Industry reports say there were 7 million motor incidents reported to insurers across the country, up from 6 million and 4.5 million in FY07 and FY06 respectively,” Mehta told Financial Chronicle.

The penetration level of general insurance in India is 0.60 per cent of its GDP and the premium may grow at a compounded annual growth rate (CAGR) of 20 per cent in the next 6 years to cross Rs 1 lakh crore by 2015 from the current size of Rs 28,000 crore.

“With IT spending in the India Insurance sector expected to grow at a compound annual growth rate of 37.5 per cent per annum by 2012, the focus will be on finding partnerships that actually deliver automation and processing that is up to the challenge of scale and growth,” Mehta said.

snehashah@mydigitalfc.com