Declining Premiums Fail To Drive General Insurance Growth

Mumbai: The non-life insurance industry growth was slower at 13 per cent in the first five months of FY08 compared with 20.29 per cent a year ago, despite premium rates declining sharply in a free pricing regime. The gross premium income of the general insurance industry, which was freed of pricing controls from the start of 2007, stood at Rs 11,780.49 crore against Rs 10,413.08 crore a year earlier. The industry had grown by 20.29 per cent in April-August 2006 with a gross premium of Rs 8,668.7 crore. The premium rates for fire and engineering policies have fell by more than 30 per cent, while discounts offered is over 20 per cent for motor own damage cover in case of private cars. The eight private players collected a gross premium of Rs 4,627.93 crore, a growth of 27 per cent against a gross premium of Rs 3635.69 crore up to the month of August last year. The four public sector players New India Assurance, Oriental Insurance, National Insurance and United India Insurance showed a marginal growth of 5.54 per cent at Rs 7152.56 crore compared with Rs 6777.39 crore in the year-ago period.

In August this year, the non-life industry recorded a total gross premium of Rs 2,108.92 crore the private sector cornered Rs 881 crore and the public sector accounted for the balance Rs 1,227 crore. The largest private insurer, ICICI Lombard General Insurance, increased by 14 per cent with a premium of Rs 1,464 against a premium of Rs 1284.52 crore up to August in 2006-07. Reliance General Insurance registered the highest growth of 195 per cent among industry players by underwriting a gross premium to Rs 808 crore. Cholamandalam grew by 77 per cent, Bajaj Allianz 33 per cent, Tata AIG grew marginally by 5 per cent and Royal Sundaram by 9 per cent. Iffco Tokio General insurance continued growth declined by 20 per cent.