Private non-life insurers have had a good run

Private non-life insurance companies are steadily eating into the market share of their public sector counterparts.

According to a J M Financial report, the gross underwritten premium for the private sector was up  27% last fiscal, while the public sector insurers grew only 13%.

To be sure, the state-backed insurers still have a 55.3% share of the non-life insurance business, but private insurers are slowly closing the gap. They already have a 44.7% share, having grown their pie by 3% in the last two months.

Better consumer services, faster settlement of claims, technological edge and increased marketing and distribution are holding the private players in good stead.

K G Krishnamoorthy Rao, CEO of Future Generali, said that the advent of several new players is helping the overall private sector in gaining market share.

M Ravichandran, president of Tata AIG General Insurance, said, “The number of public sector undertakings is finite at 4. On the other hand, the number of public companies is increasing. Moreover, the growth in the health insurance segment is also helping the companies grow.”

Amarnath Ananthanarayanan, MD and CEO of Bharti AXA, said several companies are also strengthening the commercial lines of the business and this has also helped growth.

Apart from gaining market share, private insurers will now also focus on profitability. “The commercial third-party motor pool that was dismantled from last year, has also helped the overall profitability of the companies. This is because, earlier, companies were making high provisioning for it. This has come down now,” said Ananthanarayanan.

Private non-life insurers have also been increasing the amount of premiums -- and this is expected to aid margins.