The latest update from the Non-Life Insurance sector has confirmed that the once profitable Fire Insurance Business has now turned into a loss making unit for most Private players in the General Insurance sector.

The Economic Times reported that the scenario might be so bad that two of the players are looking for fresh infusion of funds to stay afloat and promoter of another is contemplating a complete sell-out.

So what went wrong? Most industry experts say that the agressive undercutting and sudden reduction in prices is to be blamed for this. This has led to a reduction in the percentage contribution of Fire Insurance in the overall protfolio's of Private Insurers.

The ET report claims that "over half a dozen companies have pumped in over Rs 400 Crores and are still struggling to generate a ROE of 10%"

We had reported some time back that Private Insurers are gaining ground in general Insurance.
Is this a strategy to bleed initially to garner more share? or is it a trailer for other non-life insurance sectors also? What do you think?