Pvt players call the shots in non-life

Private players have contributed over 56 per cent of premium income in the non-life insurance industry in the first two months of fiscal 2005.

Till May 2004 industry premium income accreted to Rs 186 crore of which Rs 106 crore came from the private sector. Growth in the non-life insurance business has doubled from eight per cent in the corresponding period last year to 15.6 per cent this financial year.

Private insurance players' contribution has risen at the rate of 73 per cent, against a modest 7.5 per cent growth of the public sector in the month of May as per the latest figures released by the Insurance Regulatory and Development Authority (IRDA).

"These parameters suggest that 2004-05 has been turning out to be a better year than the last," said G V Rao, former chairman and managing director, The Oriental Insurance Company in the IRDA Journal.

The share of private insurance players has risen to 19.49 per cent in the first couple of months, against 14 per cent in fiscal 2004.

Among the players, Bajaj Allianz and ICICI Lombard continue to be neck-to-neck for first place, with ICICI Lombard slightly ahead with a market share of 4.78 per cent.

The public sector continues to see National Insurance Company growing aggressively outpacing even the private sector with a growth rate of 28 per cent to mop up a premium income of Rs 730.72 crore till May this year.

It is now neck to neck with the New India Assurance Company whose premium income has seen a decline in the month of May. In May 2003, New India had mopped up Rs 305.54 crore, but in the same month this year, its premium income has fallen to Rs 282.08 crore, reflecting a drop of Rs 24 crore.

This follows the company's prudence in underwriting risk business and not falling in line with industry practice. There is a lot of under-cutting taking place in the sector as 12 players vie for the same pie.

This is because contrary to the growing life insurance market, the growth in non-life business has been far less at the rate of 7.35 per cent year-on-year.

"While the market has performed better than last year, among the 12 players, only about four or five insurers seem to be creating new markets," said Rao.

Many of the new players and National Insurance are tapping a lot of the state government business. Players like ICICI Lombard are equally active in the agricultural sector in terms of weather-insurance products, especially since agriculture has caught the fancy of the new government in power.