During 2007-08, the gross premium under-written by the non life insurance sector in the country stood at Rs 28,126.29 crore, up 12.51 percent compared to Rs 24,998.41 reported in the corresponding period last year.
However the public sector companies (PSUs) grew by only 3.76 per cent to Rs 16,895.70 crore against Rs 16,282.10 crore reported a year ago, where as the the private players registered a growth of 28.85 per cent to from Rs 8,716.31 crore to Rs 11,231.19 crore.
The main reason can be attributed to the fire insurance sector, which recorded a negative growth due to detariffing which resulted in a 70-80 per cent drop of the premium rates.
The fire insurance premium has come down by 15.39 per cent in the last fiscal to Rs 3,517 crore from Rs 4,157 crore reported a year ago.
In absolute terms it dropped by Rs 639.87 crore during the last fiscal, out of this the public sector companies accounted for Rs 469.51 crore.
Fire premium for the public sector units came down by 17.95 per cent to Rs 2144.95 crore, compared to Rs 2614.46 crore reported a year ago.
Private players fared marginally better, registering a drop of 11.04 per cent to Rs 1372.32 crore against Rs 1542.68 crore reported in the previous year.
"The tremours expected post detariffing has not really pronounced in the last fiscal and the fire insurance premium would not decline further in the current fiscal," said M Ramadoss, chairman and managing director, The Oriental Insurance Company Ltd.
However, the motor and the health sector were stand out performer by registering a premium growth of around Rs 2200 crore and Rs 1800 crore respectively.
But here also the private sector outperformed the PSUs.
Out of Rs 2200 crores growth in motor private sector companies have grown by Rs 1800 crores.
"The main reason is the creation of motor third party insurance pool for commercial vehicles. Commercial vehicles insurance is being written freely by the private insurers which has added to their tremendous growth in this segment," Ramadoss explained, while giving a presentation in the FICCI Insurance Conclave.
He also said the health insurance sector is likely to be the main area of strength for the PSU insurance players.
"In the health insurance, private sector has grown by around Rs 600 crores but public sector has grown by around Rs.1200 crores. This belies theory that health insurance is the forte of private insurers," he adds.
Commenting about the future trends, Ramadoss said that the CGAR of insurance industry likely to be around 16 percent in the next 5 years in tune with expected GDP growth of 8 per cent.
The CMD feels that the premium rates would stabilise from the next financial year.
