Improving cover

The general insurance industry grew by 24 per cent in April-November 2006, riding on the thrust of private players, even as others wait in the wings.

Strong performance by private players pushed the general insurance industry growth to 24 per cent in April-November this fiscal.

Private insurer Reliance General recorded the highest growth of 419 per cent during the period under review.

The 12 general insurers collected Rs 16,580 crore in premium in the first eight months of 2006-07, compared to Rs 13,350 crore for the same period in 2005-06, according to data compiled by insurance regulator IRDA.

Market leader New India Assurance grew business by 10 per cent to collect Rs 3,337 crore, and grab a market pie of 20.12 per cent.

Delhi-based Oriental Insurance Company clocked a 13 per cent increase in premium collections at Rs 2,647 crore, and cornered a market share of 15.97 per cent.

National Insurance Company collected Rs 2,428 crore in premium, and ensured a market share of 14.64 per cent.

United India Insurance clocked 12 per cent growth in premium collection at Rs 2,351 crore, to grab 15.97 per cent of the market.

ICICI Lombard topped the list of private players by collecting Rs 2,078 crore after it expanded business 90 per cent, and cornered a market share of 12.53 per cent. The company is close to the business level achieved by established public sector players like United India, and may soon overtake them.

Bajaj Allianz General Insurance was the second biggest private player as it collected Rs 1,158 crore, with a market share of 6.98 per cent. Iffco Tokio collected Rs 813 crore, followed by Reliance General (Rs 521 crore), Tata AIG (Rs 520 crore), Royal Sundaram (Rs 388 crore), Cholamandalam (Rs 206 crore) and HDFC Chubb (Rs 125 crore).

The private players maintained an average growth rate of 62 per cent, and their combined market share was 35 per cent. In terms of growth, Reliance General was at the top, followed by ICICI Lombard, Iffco Tokio, Bajaj Allianz, Tata AIG, Royal Sundaram and Cholamandalam.

Specialised institutions "" Export Credit Guarantee Corporation (ECGC) and Star Health & Allied Insurance "" have collected Rs 391 crore and 13 crore respectively. ECGC registered a premium collection growth of 6.78 per cent.

Many new entrants to the sector are expected in the coming days. Apollo Hospital is in the process of setting up a standalone health insurance company, in association with DKV Deutsche Krankenversicherung, a leading private health insurer in Europe.

Allahabad Bank, Indian Overseas Bank, Karnataka Bank, Dabur Investment and Sompo Japan Insurance are also in the process of setting up general insurance companies.

Shriram Financial Services has teamed up again with South African insurer Sanlam to float a general insurance joint venture that would have Bank of Maharashtra as the third partner.

The detariffing of general insurance from January 1 this year has been a boon for the industry. In the initial 15 months, the insurance companies will have the flexibility to price their products.

Thereafter, they can also change the terms and conditions of policies. Post detariffing, the premium rates have come down due to competition.

---

SNIPPETS

Housing cover
Iffco Tokio General Insurance has tied up with PNB Housing Finance, a wholly-owned subsidiary of Punjab National Bank, to provide the bank's customers fire and personal accident cover along with housing loans.

Ajit Narain, managing director and CEO, Iffco Tokio General Insurance, says, "The tie-up with PNB Housing Finance is an extension of our association with the PNB Group. It will help us leverage their vast network and widespread customer base, and strengthen our marketing and distribution channels."

Compared to other policies in the market, this product offers additional benefits in terms of covering co-borrowers in addition to the first borrower, besides covering death and disability.

It is a non-lapsable cover which continues even if the housing loan has been prepaid, he adds.

The policy provides complete protection against all accidental occurrences that might lead to death or permanent total disability of the insured.

The insured will have to pay a one-time premium for the complete period of loan, based on cost of construction or value of property, says V K Khanna, managing director, PNB Housing.

Small is in
The country's largest private insurer ICICI Lombard has entered into a strategic tie-up with Small Industries Development Bank of India (SIDBI) for providing non-life insurance products to SIDBI-assisted units, SMEs and the micro finance sector .

Under the arrangement, ICICI Lombard will offer three categories of non-life insurance products.

These include asset insurance (fire, burglary for plant and machinery and other assets), creditors insurance and rural insurance solutions like weather and health insurance.

"The SME has been the growth engine of the Indian economy while micro finance is now a national priority. The growing risks in an evolving market place have highlighted the need for insurance for the micro finance and SME segments," says Sandeep Bakhshi, managing director and chief executive officer, ICICI Lombard.

"Our alliance with SIDBI is in line with our strategy of reaching out to customers across India, particularly in rural areas. We are confident that these growing sectors will provide great opportunity for penetration of insurance products," Bakhshi adds.

According to Rakesh Rewari, deputy managing director, SIBDI, "Through our alliance with ICICI Lombard, we hope to provide our customers with an augmented suite of products at accelerating momentum."

ICICI Lombard has a multi-channel distribution strategy to reach out to customers.

In addition to its 180 offices across India, the company will distribute non-life insurance products through SIDBI's 59 branches in India.