Smaller insurers report an increase in premium collections, while big players struggle

Small insurers like MetLife (60% increase), Star Union Dai-ichi (52% increase) and IndiaFirst (14% increase) have registered a higher growth in first-year premium collection that ended January 2012, according to data issued by IRDA. Big insurers, on the other hand, are still struggling to adapt to the new regulations announced by IRDA.

According to industry experts, small insurers were not majorly affected by the change in regulations, as most of them had initiated their expansion strategies alongside the regulatory reforms that followed after September 2009.

“Small insurance houses did not incur heavy losses with the change in regulations, as they initiated their big expansion plans after September 2009. But for us, it has been difficult to adapt to the regulations and new product basket,” said a CEO of a top insurance company preferring anonymity.

The declining trend has been evident over the last ten months. In January 2011, they reported a dip of 15% in new business premiums to Rs. 2,451 crore, according to IRDA data. However, industry experts say that insurers are struggling to increase premiums particularly under the individual category.

Private insurers as well as industry giant LIC are facing a tough time in increasing their individual single premium.

“We are charting different strategies to grow our business figures, but it will take some time to show results. But the regulator has to understand that we are finding it tough to adopt the new regulations,” said a CEO & MD of another top life insurance company.