Nat Insurance premium income takes a knock

National Insurance (NIC) which had occupied the position of largest general insurance player for a couple of months last year, has witnessed a four per cent decline in premium income in April 2005 and has slipped to the last position among all four public sector general insurance companies, according to Insurance Regulatory Development Authority (Irda) data.

NIC managed to corner 16 per cent of the segment and the gap between the largest player has increased by as much as six per cent with New India holding around 22 per cent of the market.

"Considering that April was the month when majority of the corporate accounts are normally renewed, the growth rate of the industry was just 12.17 per cent, against 12.7 per cent in 2004-05. The private players on the other hand have raised their market share to 27.34 per cent from 20 per cent for the last year," said the recent Irda report on general insurance.

ICICI Lombard with a premium income of Rs 87 crore was the largest among the all private players witnessing a 76 per cent growth followed by Bajaj registering a Rs 49 crore income (60.65 per cent growth). The figure for IFFCO was Rs 33 crore which registered a 51 per cent growth.

According to the report grabbing market shares in 2005-06 was likely to be difficult this year as growth in fire and marine business would have to come from business diversions from the current players, as the market growth was likely to be driven by motor and health segments, for which even the established players are showing less appetite.

In April the industry recorded Rs 2,330 crore a premium with an accretion of Rs 253 crore (12.17 per cent growth) with the new players contributing Rs 209 crore (49 per cent) and the established players Rs 44 crore (2.7 per cent).

The four public sector players seem to have hit a bad patch in April with an accretion of only Rs 46 crore and a growth rate of 2.8 per cent.

With Rs 16 crore, it is obvious that the current year has set new trends for it, and possibly for the entire group of four.

With United India showing Rs 2 crore accretion on its Rs 380 crore renewals- an improvement over its previous consistent drop in premium-it is yet another sign that consolidation is on.

Oriental has shown a growth of 7.8 per cent, and New India witnessed a 6.4 per cent growth over its renewal of Rs 511 crore. the signs are obvious that defending renewals is the major concern, as inevitably motor (other than private cars and two-wheelers) and Health segments lean towards the established players.