Despite robust collections in March, first-year premium collections by life insurance companies rose only 15.13 per cent in 2010-11, the lowest rise since 2002-03. The industry had declined by 14 per cent in that period.
In the last three years, the life insurance industry registered a growth of 25 per cent in new premium income. However, sales this year took a hit after new norms were introduced in September 2010. The first six months of the financial year accounted for most of the growth in premium income.
In 2010-11, the life insurance industry collected Rs 1,25,826 crore through the sale of new policies, compared with Rs 1,09,290 crore collected in the corresponding period a year ago.
“The private life insurance industry would take some more time to stabilise and adjust to the new norms on unit-linked products that were introduced in September, 2010. In the current financial year, we expect the private life insurance industry to grow by around 20 per cent,” said K Sahay, managing director and chief executive, Star Union Dai-ichi Life Insurance.
ICICI Prudential, which pipped SBI Life to become the largest private life insurer in terms of new business premium income, collected premiums worth Rs 7,861 crore in 2010-11, up 24.10 per cent over Rs 6,334 crore collected in 2009-10. SBI Life increased its new business to Rs 7,571 crore, a rise of 7.5 per cent compared with Rs 7,040 crore collected in the previous financial year.
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GENERAL INSURERS GROW 21.7 PER CENT
The gross written premium of the general insurance industry rose 21.7 per cent in 2010-11, compared to the previous financial year. According to data collected by insurers, the industry collected Rs 42,568 crore by writing new policies in 2010-11, compared with Rs 34,984 crore in the previous financial year.
Private insurers fared marginally better than their state-owned peers in 2020-11, registering a growth of 22.5 per cent at Rs 17,567 crore. The four state-owned general insurance companies —- New India Assurance, National Insurance, United India Insurance and Oriental Insurance —- collected Rs 25,002 crore, a rise of 21.12 per cent compared to the previous year. During March, the industry collected Rs 4,656 crore through the sale of new policies, a growth of 15.14 per cent over Rs 4,043 crore in the same period a year ago.
Government-owned New India Assurance, the largest general insurer in the country, collected Rs 7,070 crore through new policies in 2010-11, a rise of 17 per cent over the year-ago period. In the same period, ICICI Lombard, the largest private general insurer, recorded a growth of 29.04 per cent at Rs 4,252 crore.
“Most private players, particularly the smaller ones, didn’t increase their exposure to group health policies much, since the loss ratio in the segment was around 120-130 per cent. Third-party motor insurance policies are estimated at Rs 3,500 crore and most of the players chose to go slow while writing motor policies,” said a general insurance company official.