The Hindu Business Line : Modest growth in new premiums in April-Nov

Chennai, Jan. 5 The continuous downturn in equity markets has slowed down the overall growth of the insurance industry. The Insurance Regulatory Development Authority’s numbers on new premium collections for the period April - November 2008 show a modest 1.4 per cent growth compared with the double digit growth achieved over the same period of 2007. LIC, Aviva and Bajaj Allianz Life have registered a decline in new premium collections, while the rest witnessed a growth ranging anywhere between 9 and 80 per cent.

SBI Life climbs to top

A highlight of the November data is that SBI Life Insurance overtook ICICI Prudential Life by a good margin in new premia collected.

ICICI Prudential led collections until October. Group non-single premium collections, which account for half of SBI Life’s collections this month, have propped up SBI Life’s mop-ups this month.

SBI Life has raked in Rs 560.84 crore against Rs 377.36 crore of the competitor. According to Mr U.S. Roy, Managing Director of SBI Life Insurance, the surge in group non-single premium mainly comes from retirement plans for corporate clients which tends to flow in tranches.

He feels that the SBI brand has been a great advantage in garnering new premia. Of the new premium, 25 per cent has come in through the bancassurance channel. “Despite the slowdown, we expect to wrap up the financial year with a growth of 70 per cent,” predicts Mr Roy.

However, ICICI Prudential continues to be the leading private sector insurer so far this year, with a collection of Rs 4,248 crore for April- November 2008; this has grown 9 per cent. SBI Life’s collections stand at Rs 3,291.9 crore (up 78 per cent).

The ones that grew

There are a handful of other insurers who have grown as well. Birla Sun Life, Kotak, MetLife and Reliance Life have registered a growth of over 70 per cent. Among the ones that registered declines in premia garnered are Aviva (down 16 per cent). The exit of Centurion Bank and Canara Bank, the major banc assurance partners, may explain this to some extent. LIC and Bajaj Allianz too had seen declines over this period. After these declines, LIC’s market share of new premium income was at 44.4 per cent.

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