General insurers' premium growth slips to 2.33% in Feb

High discounts forced by cut-throat competition, coupled with the economic slowdown, have taken a toll on the non-life insurance companies in the country with their gross premium income collection growing by only 2.33 per cent in February 2009 as against 6 per cent a month earlier.

In fact, public sector general insurer National Insurance recorded a fall of 10.43 per cent, while Oriental Insurance, United Insurance and New India managed a growth of 7 per cent, 10.11 per cent and 3.05 per cent respectively.
 

Premium income collection of non-life insurers (in Rs crore)
Company	Apr-Feb 08	Apr-Feb 09	Growth (%)
New India	4,759.37	4,982.24	4.68
National	3,640.99	3,867.90	6.23
United India	3,368.97	3,808.08	13.03
Oriental	3,506.74	3,564.55	1.65
ICICI-Lombard	3,142.89	3,142.89	0.00
Bajaj Allianz	2,150.52	2,150.52	0.00
Reliance General	1,809.74	1,776.64	-1.83
Iffco-Tokio	1,028.29	1,257.71	22.31
Tata-AIG	740.27	813.19	9.85
Royal Sundaram	627.74	728.10	15.99
Private total	10,189.04	11,499.02	12.86
Public total	15,276.07	16,222.77	6.20
Total	25,465.10	27,721.79	8.86

Private biggies like ICICI Lombard and Bajaj Allianz witnessed a decline of 9.96 and 14.21 per cent respectively. At the same time, premium income collected by Iffco Tokio and Tata AIG declined by 4.6 and 6.7 per cent during February 2009.

Since the time of detariffing in 2007, non-life insurance business has been growing by above 10 per cent. In 2008-09, the industry expects to maintain that growth rate. But non-life insurers have faced difficulties in the motor insurance sector. They also took a hit due to companies postponing their expansion plans, reducing business related to fire and engineering policies. All three account for a major chunk of general insurers’ business.

With the growth of premium collection having decelerated over the last few months, the companies have resorted to offering high discounts in order to expand their customer base.

“The industry will grow at just over 10 per cent in 2008-09. The ongoing slowdown has affected the industry, but we expect things to improve later this year,” said General Insurance Council Secretary General S L Mohan.