New business premium collection in non-life business dips to 12 percent in FY 2013-14, the lowest in the last four years.
Slackness in automobile industry and stalled infrastructure projects led to a decline in new business premium collection among non-life insurance companies. The industry’s new premium collection growth dipped to 12% in FY 2013-14, the lowest since FY 2008-09.
In FY 2012-13, non-life insurance industry recorded a growth of 19% in its new business premium collection.
KG Krishnamoorthy Rao, Chief Executive Officer, Future Generali General Insurance attributes this to the slowdown in economic growth. “Non-life business is directly related to the economic growth of the country. Since India’s GDP growth is declining over the past two years, the industry has witnessed a downturn in its new business premium collection.”
“Slowdown in automobile sales has badly affected the growth in general insurance industry. More than 50% of business in non-life space comes through this channel,” says Anirudh Singh, Vice President - Business Strategy and Planning, Raheja QBE General Insurance.
R Chandrasekaran, Secretary General of General Insurance Council (GIC) believes that the decline in premium collection was primarily due to stalled infrastructure projects. He said “Engineering, fire and marine insurance business which collectively contribute 21% in premium collection, recorded a sharp downfall due to a lack of new projects and slump in import/export business. Also, loss ratio in motor insurance business is widening because of unsustainable premium tariff.”
Premium collection growth
|
Financial Year |
Growth in % - Private |
Growth in %- Public |
Growth in % - Gross |
|
2013-14 |
15 |
10 |
12 |
|
2012-13 |
24 |
16 |
19 |
|
2011-12 |
25 |
22 |
23 |
|
2010-11* |
23 |
21 |
22 |
|
2009-10* |
13 |
14 |
13 |
|
2008-09* |
12 |
7 |
9 |
Source: IRDA
*collections from health insurance, agriculture insurance and credit insurance were excluded.
IRDA data shows that the general insurers have collected Rs. 77,538 crore in April-March 2014 as against Rs. 69,089 crore in the corresponding period last year. The 28 companies collected Rs. 7,904 crore in March 2014 compared to Rs 7,149 crore last year.
Private sector
IRDA data shows that private non-life insurers have registered a growth of 15%, collecting Rs. 34,246 crore in FY 2013-14 as against Rs. 29,683 crore in the corresponding period last year.
Among private insurers, ICICI Lombard General Insurance has topped the premium chart by registering a growth of 12% with new business premium collection of Rs. 6,856 crore while Bajaj Allianz stood at second position with new business premium collection of Rs. 4,517 crore (13% growth) in April-March 2014.
Meanwhile, the new entrant in standalone health insurance segment Cigna TTK collected Rs. 29 lakh premium.
Public sector
The public sector insurers witnessed a 10% growth, lowest since FY 2008-09, by collecting Rs. 43, 292 crore in FY 2013-14 compared to Rs. 39,406 crore in the corresponding period last year.
Among the PSU insurers, New India Assurance collected the highest premium of Rs. 11,523 crore followed by National Insurance which reported a new business premium collection of Rs. 10,244 crore.