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C.R. Sukumar

HYDERABAD, May 12

THE falling interest rate regime has pulled down the overall new business premium of the Indian life insurance industry by a significant 18 per cent over the previous fiscal, despite the tremendous growth recorded by the private sector life insurance players in adding new business to their portfolio during the fiscal ended March 2003.

This trend is due to slow withdrawal of policies with guaranteed returns by the insurers while responding to the interest rates moving southwards.

Against a total premium underwritten of Rs 15,139.93 crore during 2001-02, the Indian life insurance industry recorded a low premium of Rs 12,324.83 crore for the fiscal ended March 31, 2003.

Announcing the analysis of new business underwritten by life insurers for the year 2002-03, the Insurance Regulatory and Development Authority (IRDA) has pointed out that the individual business of Life Insurance Corporation of India (LIC) was impacted the most with a decline of around 24 per cent as against the industry.

Despite this, the public sector life insurance major continued to hold sway. Of course, the private sector made steady inroads during the fiscal under review, which was more than expected given the experience in other markets, IRDA has pointed out.

While LIC led the chart in terms of market share in new business with a 92 per cent share in entire industry, down from 98 per cent in the previous fiscal, the private sector improved its overall market share to eight per cent from two per cent in the previous fiscal.

The analysis of the new business figures furnished by the private life insurers reveals that the overall business captured by the 12 players rose to Rs 981.24 crore during 2002-03 from Rs 296.61 crore in the previous fiscal, a growth of 231 per cent.

It was ICICI Prudential that topped the private sector new business market with a share of 38 per cent. While Birla Sun Life followed it with a market share of 15 per cent, HDFC Standard garnered a share of 14 per cent, Max New York 8 per cent, SBI Life 7 per cent, Tata AIG 6 per cent, Allianz Bajaj 5 per cent, Om Kotak 3 per cent, ING Vysya 2 per cent and Met Life and Aviva 1 per cent each. AMP Sanmar registered no market share.

In terms of total market, the share of ICICI Prudential stood at nearly three per cent, followed by Birla Sun Life and HDFC Standard at 1.21 per cent and 1.08 per cent of the premium underwritten.

Analysing the performance of LIC, the regulator said the individual business, inclusive of Bima Nivesh and Single Premium, suffered a decline at Rs 9,361.11 crore.

Similarly, the individual pension plans of LIC recorded a decline of 87 per cent at Rs 327.75 crore. However, the number of individual assurance policies showed an increase of 9.54 per cent over the previous fiscal at 239.31-lakh policies.

As against this, the pension and group schemes of the public sector insurance major exhibited a growth rate of 65 per cent with new business premium of Rs 1,645.74 crore covering 18.48-lakh lives. Accordingly to IRDA analysis, the growth in this sector was the highest recorded in the last ten years.

In the social sector under the Janashree Bima Yojana and the Krishi Shramik Samajik Suraksha policies, LIC covered 7.46-lakh lives under 6,071schemes generating a premium income of Rs 8.37 crore, which was marginally lower than the previous year.

In terms of number of policies, while ICICI Prudential issued around 2.45-lakh policies, while HDFC Standard and Allianz Bajaj followed with 1.25-lakh and 1.16-lakh policies, respectively.

In terms of premium underwritten in rural sector, SBI Life led the list with a premium underwritten of Rs 5.04 crore, followed by Met Life at Rs 2.15 crore.

In terms of number of policies underwritten in rural sector, ICICI Prudential led the chart with 29,376 policies.

SBI Life, which recorded a premium of Rs 39.45 lakh covering 37,478 lives, dominated the social sector the IRDA report says.

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