Slowdown in automobile, infrastructure and steep discounts hurt the industry.
Non-life insurance’s new business premium collection has been on the declining trend since the start of FY 2013-14. IRDA data shows that new business premium collection of general insurance business has declined from 22% in April to 16% in April-August 2013. Expert attributed this to slowdown in automobile sector and infrastructure sector, import-export business (marine and fire insurance) and stiff competition among players.
|
Period FY 2013-14 |
Industry Growth in % |
Growth in % -Private Insurers |
Growth in % -
Public Insurers |
|
Average Growth of Previous FY |
19 |
24 |
16 |
|
April |
22 |
31 |
15 |
|
April-May |
20 |
28 |
13 |
|
April-June |
18 |
26 |
13 |
|
April-July |
17 |
24 |
12 |
|
April-August |
16 |
22 |
12 |
R Chandrasekaran, Secretary General of General Insurance Council (GIC) believes that the slowdown in automobile and infrastructure sectors has resulted in decline of new business premium collection. However, he expects that the industry will recover after the implementation of new product guidelines from October 1, 2013.
“Stiff competition among non-life players is the key reason for declining premium collection,” says Anirudh Singh, Raheja QBE General Insurance. He adds that many insurance companies offer huge discounts on their products to capture the market share causing a decline in premium collection.
Ritesh Sheth of Tejas Consultancy seconded the view and says that slump in import-export business has led to a fall in premium collection of marine and fire insurance segment which collectively contribute around 18% of business.
IRDA data shows that the general insurers have collected Rs 32,308 crore in April-August 2013 against Rs 27,823 crore in the corresponding period last year. The 27 companies have collected Rs 6,415 crore in August 2013 compared to Rs 5,750 crore last year.
The data also states that private non-life insurers have registered a growth of 22% by collecting Rs 14,087 crore in April-August as against Rs 11,552 crore in the corresponding period last year. The public sector insurers have witnessed 12% growth by accumulating Rs 18,221 crore against Rs 16,272 crore in the corresponding period last year.
Among the PSU insurers, New India Assurance collected the highest premium of Rs 4,855 crore followed by United India which reported a premium income of Rs 4,347 crore.
Among private insurers, ICICI Lombard General Insurance has topped the premium chart by registering a growth of 23% with premium collection of Rs 2,892 crore while Bajaj Allianz stood at second position with premium collection of Rs1,867 crore till August 2013. Religare has shown a robust growth of 669% in the premium collection by accumulating Rs 70 crore in April-Aug 2013.