Nationalised general insurers, losing out to the more aggressive private players, have come under fire from one of their own for their poor showing
Premium collections in first half FY08 were way below pvt sector peers
KOLKATA: Nationalised general insurers, losing out to the more aggressive private players, have come under fire from one of their own for their poor showing in the free pricing regime.
Data from the first half of the current financial year, details of which are available now, shows the four PSU companies - National Insurance, Oriental Insurance, New India Assurance and United India Insurance - together accounted for a fourth of the total new business.
Of the premium accretion of Rs 1,454 crore in the period, PSU insurers contributed Rs 354 crore. The bulk of the remainder - Rs 1,046 crore - was collected by the three private players ICICI Lombard, Reliance General and Bajaj Allianz General.
“PSU insurers seem to have lost the first round of price level competition. They have failed to capitalise on their huge financial net worth to regain lost market shares in any portfolio. Their performances seem listless and show that they are getting marginalised at the market in every portfolio,” analyst G V Rao said in a recent analysis.
Rao, a former chairman and managing director of Oriental Insurance, is a noted analyst on the sector and a member on various committees of the Insurance Regulatory and Development Authority (Irda).
“Does this not signify that PSU insurers are struggling even more in a detariff environment than when tariffs regulations were in force,” Rao asked in the analysis, calling the results a big show by the private players, particularly the “three prowling tigers”.
“The three insurers are setting a scorching pace of growth leaving the rest of the market as ‘also rans’,” Rao pointed out. Segments like motor, health, fire, liability or personal accident have seen the private sector march ahead of the state-owned players.
In the motor segment category, which constitutes 42% of the premiums underwritten, PSU majors saw their collections decline by Rs 120 crore. The private players, meanwhile, garnered Rs 476 crore as premium. In the third party motor segment, PSU insurers collected Rs 280 crore, while their private sector peers managed Rs 400 crore.
Rao was not optimistic on future prospects of the PSU insurers either. “As the PSU insurers continue to perform in their present mode of self denial, their recovery would seem difficult,” he said.
At the end of November 2007, the industry had achieved a market accretion of Rs 1,950 crore, of which private players had garnered Rs 1,540 crore.
g_nandini@dnaindia.net
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}