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G. Naga Sridhar

Hyderabad, April 10 Private players in life and non-life insurance have reason to cheer as they have anchored the industry growth in a significant manner in the first half of 2007-08 by surpassing the public sector players in total premium underwritten.

The growth reported by private insurers, especially in life, reflects more acceptability and respectability of the private insurance companies, Mr C.S. Rao, Chairman, Insurance Regulatory and Development Authority (IRDA), told Business Line here when asked on the trends in the industry.

The ability of the private players to cash in on the urban markets and innovative distribution channels drove them to higher growth, he said adding: “They are also able to get more business by convincing a policy holder to go for an additional one, exploiting the unsaturated urban markets,” he opined.

According to the annual report 2006-07 released by IRDA a couple of days ago, during the first six months of the last financial year, Rs 33,159.53-crore premium was underwritten by the life insurers against Rs 29,664.64 crore in the comparable period of the previous year, representing a growth of 11.78 per cent.

The Life Insurance Corporation and 18 private insurers (now 21) accounted for Rs 22,761 crore and Rs 10,398 crore respectively. While LIC’s performance was down by about 3 per cent, the private insurers grew by 67 per cent.

In the number of polices too, private players scored over LIC by growing 99.2 per cent compared to 61.6 per cent by the latter. In terms of market share, LIC was down to 68.64 per cent (79 per cent).

In non-life, total underwritten premium increased 11.68 per cent to Rs 13,904 crore. The public sector non-life insurers grew 4.3 per cent against 25.3 per cent by private players. The market share of the public and private insurers was at 60.9 per cent and 39.1 respectively.

The insurance industry was opened up to the private players in 2000.

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