LIC premium declines by 47%

Life Insurance Corporation of India (LIC) has registered a decline in first year premium by 47 per cent in September this year compared to a year earlier, albeit on larger base.

According to the data released by Irda, the public sector behemoth mopped up a first year premium of Rs 2,554.84 crore in September this year compared with Rs 4,853.87 crore in September 2006.

For the first six months ended September 30, 2007, LIC has registered a decline in first year premium by 2.87 per cent at Rs 22,761.49 crore as against Rs 23,435.08 crore up to September 2006.

For the first six months in FY2007, LIC had witnessed a growth of 178.68 per cent with new business premium of Rs 23,435.08 crore compared with Rs 8,409.09 crore up to September 2005.

For the first six months ended September 30, 2007, the 15 private life insurance players grew by 66.91 per cent by collectively mopping a first year premium of Rs 10,398.04 crore as against a premium of Rs 6,229.55 crore up to September 2006.

The total life insurance industry grew by 11.78 per cent for the six months ended September 2007. The largest private insurer, ICICI Prudential grew by 49.79 per cent to Rs 2,614.21 crore compared with Rs 1,745.17 crore in HY1FY07.

For the same period up to September this year, smaller Kotak Life Insurance grew by 51 per cent with a new business premium of Rs 277 crore, Birla Sun Life grew by 87per cent with a premium of Rs 596.61 crore.

General insurance
The non-life insurance industry continued to witness the after effects of detarriffing. For the month of September the industry grew by 2.71 per cent with a gross premium of Rs 2,127.02 crore as against Rs 2,070.71 crore in September 2006.

For the first six months, April to September 2007, the general insurance industry grew by 11.37 per cent at Rs 13,903.11 crore as compared to a gross premium of Rs 12,484.27 crore up to September 2006. The industry last year was growing over 20 per cent.

Insurance companies in order to withhold their existing customers and grab new customers have been competing with each other on price.

The premium rates for fire and engineering policies have dropped in excess of 30 per cent while the discounts are over 20 per cent for the motor own damage covers in case of private cars. Irda has capped the discounts for fire and engineering at 51.25 per cent.

The four public sector insurance companies "" New India Assurance, Oriental Insurance, National Insurance and United India Insurance "" did a gross premium of Rs 8,461.60 crore for the six months ended September as against Rs 8,143.71 crore in April to September 2006, a growth of 3.90 per cent.

The eight private insurers collectively did a gross premium of Rs 5441.51 crore from April to September 2007 as against Rs 4340.56 crore, a growth of 25.36 per cent.