Premium income declines for 6 of 12 private insurers during October

October has not been a very good month for life insurance players as six of 12 private insurers collected lesser premiums compared with September, according to IRDA journal data.

Firms that have seen a fall in premium collection are Bajaj Allianz, ING Vysya, Birla Sunlife, Kotak Mahindra, Aviva and HDFC Standard. Three of these are, incidentally, among the top five players in the private sector.

For instance, Bajaj Allianz's new premium decreased by Rs 2.25 crore in October, as compared to September. While HDFC Standard's premium collection came down by Rs 15 lakh, Aviva's has decreased by Rs 1.45 crore.

Kotak Mahindra's new premium collection also came down by Rs 78 lakh in October. The highest downturn, however, has been in the case of Birla Sunlife, that saw a decrease of Rs 6.48 crore in premium collection during the same period.

In spite of these differences in numbers in September and October, all the players have maintained their pecking order, in terms of the business they have garnered, because of the cumulative premium they have collected so far during the year.

Group insurance schemes, however, seem to be on an upswing with eight out of the 13 life insurance players registering growth. LIC, ICICI Prudential, Max New York Life, Metlife, SBI Life and AMP Sanmar are some of the life insurance companies that have garnered growth in the group insurance sector.

Players like HDFC Standard and Aviva, that have lost out on new premium collection have also seen a growth in group insurance premium. Incidentally, only five out of the 13 players have seen a rise in new individual premium collection in October.

Says an executive with HDFC Standard, "A large number of companies are now looking at group insurance with renewed vigour as it is easier to get groups insured. Moreover, all players started off on the retail side first and then moved on to group insurance. So while companies may have garnered their target numbers in individual insurance, they would have realised that there is more to do on the group side."

ICICI Prudential has, for instance seen its group insurance premium grow by about 118 per cent in October. Max New York has seen a growth of about 142 per cent and Met Life a growth of around 78 per cent in new group insurance premium during the same time.

Similarly SBI Life has registered a growth of around 42 per cent in the same category. Its individual premium has, however, seen a downslide. 
S Krishnamurthy, CEO of SBI Life says, "One of the reasons for a fall in individual premium in October is the festive season. As our individual insurance business is through insurance advisors and agents, who were busy during Durga Pooja and other festivities, the premium numbers have come down. There is no conscious strategy on our part to focus on group insurance."

"Moreover, our group insurance business is basically through our SBI branches. We bunch account holders and home loan takers in groups and provide group insurance to them. So this business cannot be affected by the festive season," Krishnamurthy points out.

Ramana Reddy C V, pricipal officer of Hyderabad-based Helios Insurance Services Pvt Ltd says that the fact that private players are garnering more group insurance premium may be because of shift of corporates from LIC to private players.

"We have come across a few incidents where corporates have not been happy with LIC's services and have decided to shift to other insurance players," Reddy says.

Private players are cashing in on the perceived inefficiency of the public sector behemoth by sending regular reports and faster service to their clients, he adds. The percentage of lives covered by LIC under group shemes has come down from 67 per cent to 64 per cent in October.