A private party in non-life insurance

They accounted for nearly 40% of premiums in first half of FY08

KOLKATA: Private players have made significant inroads into the general insurance market in the first six months of fiscal 2008, according to provisional and unaudited figures from the Insurance Regulatory and Development Authority (Irda).

These companies have underwritten nearly 40% of the total general insurance premium in the first half of fiscal 2008. The eight non-life players in the private sector logged a 25% growth in premium collections to Rs 5,442 crore.

In comparison, the nationalised sector, which has a larger base, grew at a slower 5% pace. The National Insurance Company registered a 7% growth in premium collections to Rs 1,955 crore. It was followed by New India Assurance, which grew by 4.5% and collected  Rs 2,666.67 crore.

Newer companies like Reliance General recorded a 151% growth in premium during the first six months. K A Somasekharan, president and CEO, Reliance General, said, “Focus on retail investors and deeper penetration in Tier 3 towns have contributed to our growth”. Reliance Healthwise, the company’s health insurance policy launched earlier in the year, covers 2 lakh families.

However, Standard and Poor’s points out that the insurance sector needs to pull up its underwriting performance. “India’s insurers’ profitability was supported by investment income and gains, which is not a healthy trend for the sector’s long term development ,” the rating agency said.