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| Life insurers put a lid on losses |
| BS Reporter / Mumbai Feb 02, 2010, 00:23 IST |
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Better control on management expenses and income from investments helped top five life insurance companies pare losses in the third quarter of the financial year.
Insurance companies do not disclose profit or loss figures quarterly as they are not listed. From March this year, they will have to disclose their quarterly numbers, including the revenue account, within 45 days, according to the new norms issued by the insurance regulator.
Reliance Life, which wants to be the first insurer to list if the relevant rules are eased, lowered losses by 300 per cent to Rs 63.2 crore during the quarter ended December 2009 from Rs 253.9 crore a year ago. During this period, it opened 102 offices and increased the number of its agents by 49,494. The listing norms prescribe 10 years of operation before listing.
Sam Ghosh, managing director, Reliance Capital, said there was no capital infusion during the quarter. After the economic slowdown, insurance companies had rationalised their expansion plans.
The largest private sector insurer, SBI Life, reported a profit of Rs 82.66 crore as compared to a loss of Rs 82.17 crore in the corresponding period last year.
“Given our distribution model, our management expenses are low. Our profit is both due to fresh sales and income from investments in the equity market. We are looking at a profit of Rs 230 crore this financial year,” said MN Rao, managing director and chief executive. The insurer posted Rs 190 crore profit in the first nine months, of which Rs 73 crore was investment income.
Bajaj Allianz Life Insurance, the life insurance arm of Bajaj Finserv, has recorded a loss of Rs 4 crore as against a loss of Rs 21.42 crore in corresponding quarter last year. “Our profit according to policyholders’ account is Rs 155 crore. According to the shareholders’ account, the losses are Rs 4 crore, but if you even out both, the profit is Rs 151 crore,” said Rajesh Vishwanathan, chief financial officer, Bajaj Allianz Life Insurance.
Birla Sun Life brought down its losses to Rs 142.8 crore in October-December 2009 from Rs 165.8 crore in the corresponding quarter last year. The shareholders infused Rs 100 crore in the third quarter of the financial year.
“We continue to focus on long-term products. Our main focus was to bring down expenses, which have come down by 400 basis points in the last one year,” said Mayank Bathwal, chief financial officer, Birla Sun Life Insurance.
ICICI Prudential has also cut losses but declined to share the numbers.
“Expenses came down sharply, helping us move towards profitability. We have not infused any capital in the insurance arm in the last nine months of the financial year,” said V Vaidyanathan, managing director and chief executive, ICICI Prudential.
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